(Previously published in Inside Conveyancing)
Our Managing Director, Rob Gurney, shares his thoughts on the economics of the property market, and what might happen next.
“Writing this piece in early March 2024, I have the slightly easier task of commenting upon the state of the conveyancing profession, having just witnessed a significant and welcome month-on-month increase in transaction volumes across our customer base. Had this piece been written even three months earlier, the optimism level would have likely been quite different.
It is very difficult to predict what will happen to the property market in the future – it always has been. But since 2019, the last year when we witnessed the stability of more normal levels of seasonality, all bets have been off. I do not need to go into the details of the roller-coaster journey that conveyancing firms have had to endure over the past four years, but the word “unprecedented” is very much appropriate to what has been witnessed. The current steady recovery we are experiencing is therefore quite welcome, and long may it continue.
The question is – at what point does it stop becoming a welcome experience and turn into a problem of its own? Or, in other words, where is the current capacity level for conveyancing in England & Wales sitting, and when will it be breached if transaction numbers continue to rise?
The problem with either extremes of workload is that both situations lead to the same outcome – good staff leaving the profession. When the property market is down, conveyancing numbers drop, and firms have to move quickly to reduce their staffing accordingly in order to remain profitable. When the market booms, workloads increase at a greater rate than staff recruitment and training can cope with, and the extra pressure placed on those in-situ leads to burnout, disenchantment, and resignations. And we all know that those extremes have been categorically redefined over the past few years since Covid.
At Landmark, we keep a close eye on the relationship between conveyancing completions and instructions, and monitor the ratio on a monthly basis. The ratio gives us an insight into whether the profession as a whole should be able to manage workloads, or if we are to expect a build-up of work-in-progress and subsequent delays or service issues. So far, the numbers are looking good.
As we stand, 2024 is looking likely to be a much better year for conveyancers than 2023, but we need to remain mindful of the fact that our national capacity level is currently uncertain, for the reasons outlined above, and very likely to be lower than it was before the last cycle of peak-and-trough. So if this is to be a recurring pattern, we ultimately do need to properly address the conveyancer capacity planning challenge before it becomes a serious blocker to the market and the homebuying and selling public.”
To read our report on why property transactions are taking so long, click here.
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