SPECIAL FEATURE: Q2 Property Trends, conveyancers continue to face challenges – Landmark Information Group

SPECIAL FEATURE: The Landmark Information Group has written an article on the Q2 Property Trends, and how conveyancers continue to face challenges.

Landmark has recently released its Q2 Property Trends Report, which summarises market data from the England and Wales property market between April and June 2022. Overall, the data points to a general stabilisation in conditions in Q2, relative to the sometimes-wild fluctuations of the past few years. Demand has steadily decreased, yet still sits a little above 2019 levels, while supply is catching up to create a more balanced market.

On this basis, we would expect the conveyancing picture to be similarly stable and akin to pre-pandemic levels in line with the rest of the transaction pipeline. And, while in Q2 we did see conveyancing volumes stay relatively consistent from month to month, they ran at an average of 13% down against 2019 volumes. Typically, Q2 sees seasonal variations in the data, driven by the traditional rise in post-Easter market activity. The flatter performance we saw in the last quarter’s data does not necessarily mean that the seasonal upticks didn’t occur, simply that they were obscured by the effects of market nervousness across the pipeline, as the cost-of-living crisis, down-valuations, expired mortgage offers, and subsequent chain breakdowns had some impact.

Compare and contrast

When we look at the ratio of completions to instructions, which typically provides a good barometer of conveyancer workloads, levels in Q2 were comparable to 2019 – which is striking when you consider that economic and property market conditions were very different three years ago. So, while we saw relative stability in this ratio in contrast to the 46% swing at the end of the SDLT holiday last year, behind the scenes the story seems different. The effects of buyer hesitancy and precarious chains are now apparent in conveyancer workloads. Those chains continue to lengthen, too: in June 2022, the average UK residential sale took 157 days from instruction to completion, 29 days longer than in H1 2021.

Also impacting the industry, of course, is the continued talent shortage affecting the conveyancing industry, stretching existing resources to their limit. With increasing numbers of conveyancers leaving the profession, finding, then training and retaining talent is challenging. As a result of these multiple factors, the backlogs that started during the pandemic housing market boom have not yet abated, even as market conditions calm.

Answering the need for speed

Against this backdrop of lengthening transactions and demands on resourcing, conveyancers would do well to consider where they can ease this pressure cooker to some degree. The first place to look is digitisation; in our 2021 market research, 81% of the residential property lawyers and conveyancers we surveyed told us that the pandemic had highlighted ‘digitisation gaps’ where key technologies could enhance the conveyancing process – but were not yet doing so.

As an industry that has traditionally relied heavily on manual processes, particularly for managing and interpreting multiple complex data points, conveyancing is now subject to myriad possibilities offered by new-entrant technology vendors and more established players such as Landmark. Digital transformation as a concept may feel challenging – What about interruption to business as usual? What about risk? And cost, not to mention cultural change? – but perhaps the key message here is that transformation can be subtle and incremental. Of the many necessary processes and steps involved in conveyancing, those that can be automated – or at the very least, intelligently assisted – by plug-and-play tools that harness AI and machine learning, for instance, can make a huge difference when the time-and-effort impact is considered across the entire firm’s caseload.

The ultimate win-win

And so, while I will be interested to see whether the evening out of market activity continues into Q3, giving conveyancers any opportunity for respite (or, at the very least, the chance to chip away at the backlog a little faster), I am equally curious as to how the wider data will play out in the longer term. Will transaction times stabilise and start to shorten as the overall market cadence steadies, and to what extent will the move to digitalised processes impact not only transaction speed, but also conveyancer workloads and performance? One thing we do know is that property is a complex and interconnected ecosystem, so what affects one part of the pipeline will inevitably be felt further down the line, too. My hope for conveyancers is that, with digital momentum behind them, transactions will become more joined up, less fraught and ultimately, quicker. The long tail of that at the conveyancer end would be increased caseload capacity, improved retention and positive impacts on the bottom line. But let’s not forget, this scenario would create a welcome ripple effect back towards lenders, estate agents and consumers too.

Download Landmark’s Q2 2022 Property Trends Report for England and Wales here.

Download Landmark’s Q2 2022 Property Trends Report for Scotland here.