How are conveyancers navigating the fluctuating interest rates?
Lucy Cromwell has written an article on the subject of how conveyancers are navigating the fluctuating interest rates.
The UK property market is often described as unpredictable; a volatile landscape rocked by a changing economic climate and fluctuating interest rates. Interest rates will always change, however it is the role of a conveyancer to be aware of these changes as well as their potential impact.
In this article, we will discuss how conveyancers are navigating fluctuating interest rates and supporting homeowners and aspiring homeowners in their property goals.
About the UK’s fluctuating interest rates
According to BBC News, “In September (2023), the Bank rate, set by the Monetary Policy Committee, was unchanged from the previous month at 5.25% […] The Bank rate is currently at its highest level for 15 years [5.25%].
“The theory is that raising interest rates makes it more expensive to borrow money, meaning people have less to spend, reducing demand and inflation.”
Just under one third of UK households have a mortgage and fluctuating interest rates have a big impact on both homeowners and those trying to get a mortgage with bad credit.
As BBC News continues, “when interest rates rise or fall, more than 1.4 million people on tracker and standard variable rate (SVR) deals usually see an immediate change in their monthly payments […]
“Comparatively high interest rates mean house buyers and those remortgaging will have to pay a lot more than if they had taken out the same mortgage a year or more ago.”
What does this mean for conveyancers?
Fluctuating interest rates always have an impact on conveyancers. This is because conveyancers deal with the legalities of buying and selling properties. Let’s take a look at how changing interest rates are affecting the conveyancing industry and how the professionals are navigating these challenges.
Conveyancers are in high demand
As a result of fluctuating interest rates, conveyancers are seeing a high demand for their services. This demand comes from those wishing to sell, those wishing to buy, and those keen to remortgage their properties.
According to HM Land Registry, “Conveyancers are critical for a healthy property market.
“And yet we know that recently, [they] have been working in an intensely pressured environment, with high workloads.
“Search Acumen reported recently that average workloads have increased by 15% for conveyancers, despite a less than 1% increase in law firm capacity over the same time.”
The high demand for conveyancers is putting pressure on those working in the industry. Trying to balance increasing workloads and pressure from consumers against a volatile economic environment is definitely challenging!
Many conveyancers are relying on technology during this time to help streamline their workloads, take care of menial tasks, and save time. In fact, according to the Law Gazette, “secure paperless buying and selling of property ‘could be the norm’ by 2024-25”.
The roles of employers: conveyancers are under a lot of pressure and it is important for employers to provide the right support (especially during busy periods). According to Rob Gurney, Managing Director of Ochresoft: “We should attempt to eradicate as many inefficient tasks and use as much automation as possible, leaving the lawyers to do more of what they do best (and love most) – the legal work!”
Pressure from consumers
Everyone wants a quick and easy mortgage transaction. And, due to fluctuating interest rates, many people are rushing to secure fixed rate mortgages that protect their finances against future increases. Demand is high and time is of the essence for everyone!
According to Today’s Conveyancer, “The rise of click-and-buy culture has instilled a desire for immediacy, even when it comes to purchasing a home.
“Unfortunately, legal services have not been able to keep up with these heightened expectations […] the modern expectation for immediate information and constant communication adds pressure to conveyancers […]
“Each phone call or complaint chips away at the already stretched resources, further impeding progress.”
The role of the consumer: To help move things along faster, conveyancers are asking consumers to play their part. It is the role of the consumer to ensure the relevant documentation is made available. It is also important consumers complete and submit their paperwork in a timely manner. This avoids delays and can speed up a time-consuming process. It also removes the need for lots of back-and-forth between the conveyancer and consumer, saving time for everyone.
Preparing for the worst
Conveyancers should always be prepared for the worst. As Estate Agent Today shares, “preparing for the worst is vital for the resilience of the legal services sector and for the sustainable provision of conveyancing and probate services to the public.”
Conveyancers have faced unprecedented times in the last few years (as have we all). From the coronavirus pandemic to the War in Ukraine and subsequent recession, it’s fair to say the property landscape has been through some challenging times. This has all had a significant impact on homeowners, buyers, retirees, and investors (to name a few).
Thankfully, conveyancers are highly qualified and experienced to manage property transactions with confidence, even during difficult times. Well-qualified and experienced conveyancers know what they’re doing and do it well. They support the consumer through every stage of their property journey so they can achieve their property goals.
Preparing for the worst means conveyancers can handle whatever situation they are faced with confidently and professionally.
Hope is on the horizon
Despite the many challenges faced by conveyancers in recent years, hope is on the horizon. After fluctuating interest rates making property transactions difficult for everyone, the tide is expected to turn.
According to Martha Vallance, Chief Operating Officer, Dye and Durham, “It’s clear that many people in the UK continue to be affected by the tough economic conditions, with rising bills and high interest rates making people feeling financially worse off […]
“However, as rates begin to hold – and eventually decline – we expect to see a significant upswing in areas like real estate transactions, business originations and others that should help legal firms bounce back from a slower-than-normal year.”
In summary
Fluctuating interest rates will always have an impact on the conveyancing industry, causing uncertainty for all. However, conveyancers have the know-how and experience to navigate these challenges with confidence and professionalism.
The UK property market will always be faced with change and, unfortunately, interest rates never remain fixed for long. However, we hope the information in this article provides a sense of confidence and hope as we move forward together.
Kindly shared by Lucy Cromwell
