The biggest issue shaping the conveyancing agenda

"It will not take a genius to work out that most current buy-to-let business is also remortgage rather than purchase, and from a strong position two-three years ago, the numbers are down considerably."

The strain has clearly been showing in number of conveyancing operators, not helped by the lenders it has to be said and their insistence on paying peanuts for increasing volumes, and given what is happening in the remortgage market and the large volumes being written, one can expect this debate to go on for some time.

Secondly, we have the whole debate around leasehold and the Government has just this week put forward proposals to stop new-build leasehold, and to ensure some of the key problems around, for example, escalating ground rents are solved. Again, this is one area where the pressure appears to be put back on the conveyancers, with some suggestions that it is conveyancers who are to blame when it comes to buyers purchasing leaseholds and only finding out later all the costs and terms that come with their lease.

Again, it seems patently reasonable that this information is presented to the prospective purchaser upfront in the process so they can make informed decisions before going ahead with a purchase. Conveyancers clearly have a role here but so do estate agents, and the developers’ use of solicitors, plus of course the pressure that is placed on buyers to exchange or incentives are forfeited makes for an unseemly process that can do significant damage. There is much else wrong with the leasehold process but these Government measures at least appear to be a move in the right direction.

One area which however has perhaps not been covered so much, and impacts on all our businesses whether you’re an adviser, conveyancer, distributor, etc, is that of transaction levels. I’ve talked above about greater remortgage activity, and clearly many lenders are offering free legals in this space which keeps some volume conveyancing firms active – we’ve talked much about advisers recommending clients take the cashback on offer in order to secure their own representation rather than be placed into the free legal system where delays can occur.

We have panel members who are also active in the free legal space but it’s clear that the remortgage business is split between those choosing their own conveyancer and those having one chosen for them by the lender. But, what of other transactions? How are they holding up through 2017 and what are business levels like for practitioners?

Much has been made at the damage that has been wrought, for example, on buy-to-let purchase activity since the Government and the FCA introduced its changes. It will not take a genius to work out that most current buy-to-let business is also remortgage rather than purchase, and from a strong position two-three years ago, the numbers are down considerably. Also, in residential purchase we have not seen a considerable increase in transactions – indeed, if anything, we can seeing less property supply coming to market and more people staying put as they worry about the post-Brexit housing market and the UK economy.

Even the Office for Budget Responsibility is now saying the Treasury coffers are going to be hit because of this fall in overall transactions, a dip in prices and subsequent drop in stamp duty receipts. It’s saying that next year the take from stamp duty could fall by £10 billion and puts this down to factors such as falling prices and a potential for another financial crisis which would clearly impact on potential purchasers’ ability to buy. Add in the impact of the 3% rise in stamp duty for additional property and we’re seeing some challenges for the Treasury to overcome in the future.

Despite it being an issue under the radar, a concerted fall in transactions – especially those overseen by advisers – could make business a lot harder to come by and have an impact on income levels. We’ve said it often enough but the ability to mine every financial need from a client is absolutely vital, particularly in a falling transaction environment. Make the most of that client and make sure you cover all advice areas such as conveyancing, protection, insurance, and the like. As the Brexit negotiations move on, one senses that uncertainty and instability will grow and people will not want, or wish, to make big purchases or moves. If this is the case, then having the ability and service offering to cover off as many of your client’s needs as possible, is going to be absolutely key.