A combination of regulatory action to cool the housing market and pre-election uncertainty also contributed to a year-on-year fall of 5% in activity volumes.
Additionally, transaction levels have fallen faster than the number of active firms in the market, both quarterly and year-on-year. As a result, competition is on the rise with the average conveyancing firm recording 57 transactions during Q1 2015, just below the 58 clocked up a year earlier and down 14% from 67 in the final quarter of 2014.
The number of conveyancing firms active in the market continued to fall in Q1 2015, with 4,177 firms registering transactions each month on average. This was 2% fewer than the 4,259 that were active in Q4 2014 and 4% fewer than the 4,330 active in Q1 2014.
Nevertheless, dealing applications – which make up the bulk of activity and include transfers of title, charges and notices – performed well in Q1 2015, totaling 204,860: up 63% from 125,421 in Q1 2014. Transfer of part applications during Q1 2015 were also up 39% annually from 19,889 (Q1 2014) to 27,622.
Mark Riddick, Chairman of Search Acumen, commented:
“The fact that larger conveyancing firms have been impacted most by the slow start to 2015 is a clear sign that no-one is immune to competitive pressures in a temperamental housing market. A drop in transactions during Q1 was perhaps an inevitable result of stricter lending criteria and pre-election uncertainty. Conveyancers can take some comfort from the fact that the average firm is still clocking up considerably more transactions than they were two or three years ago.
“Looking ahead, the quick transition from Coalition to Conservative governments will help to avoid the market disruption that might have come from weeks of post-election party negotiations. There is still a real need for major supply side policies to create more movement in the property market. But factors such as negative inflation, low mortgage pricing and the improving outlook for jobs should help to boost activity this year.
“All the same, our analysis clearly shows that conveyancing firms cannot simply rely on there being more customers to go round if they want to maintain and grow their own volumes. At the start of the year, they reported that improving systems and processes was the biggest challenge to growing their business. Fierce competition means there is no room for operational inefficiencies and no time for any firm to take their eye off the ball if they want to hit – or exceed – their 2015 targets.”
