According to Search Acumen, the 9% drop equates to more than 500 firms. Its analysis suggests the number of conveyancing firms currently operating in the market is now 30% lower than the 7,779 firms that recorded transactions during 2005.
The quickening pace of decline over the last year left the average firm to record 192 transactions in 2015, 10% above the 2014 average of 175. This came despite the overall conveyancing market remaining flat with 1,030,023 transactions in total during 2015, up by just 4,389 or 0.4% from 2014.
However, the 10% annual gains are the lowest seen in four years. In comparison, the average firm recorded 33% annual growth in transactions during 2014, 15% in 2013 and 40% in 2012 as the market rebounded from the recession.
The market share of the top 1,000 ranking firms rose to 71% in 2015 - the highest since records began in 2005. Ten years ago, the 1,000 biggest firms accounted for a comparatively small 55% of conveyancing transactions.
Within the top 1,000 firms, those ranked in the top five positions saw their average annual transactions dip 5% from 2014; while the top ten saw annual volumes drop 10%.
‘Challenger’ firms ranked 21-100th fared better with 5% average growth, but this was bettered by the average 8% annual growth recorded by firms outside the top 1,000.
Direct enquiries and personal referrals were the most common source of business growth by conveyancing firms during 2015, with 70% of firms questioned by Search Acumen reporting a rise in business from this channel. This includes one in five (21%) that experienced a significant increase.
Mark Riddick, Chairman of Search Acumen said:
“The trend in market consolidation continued in 2015 with the dropout rate of 9% three times higher than the 3% seen in 2013 and 2014. Despite more conveyancers leaving the market, transaction volumes grew only slightly in comparison to growth in a very buoyant 2014.
“In fact, the average firm saw its transaction volumes grow at the slowest rate since 2012. This was the year when the property market was still coming out of the post-recession doldrums – and therefore a very low benchmark. Growth in the upper echelons was also muted despite the top 1,000 gaining market share.
“The importance of referrals and direct enquiries as a source of new business should help to focus minds on the priorities for 2016. There is no room for a laid-back expectation that introducer-driven guaranteed business from sources like estate agents will simply keep coming through the door. The more that firms can do to meet and exceed expectations with the service to existing clients, the better chance they have of benefiting from this trend.”
