"This capacity crunch is set to escalate over the next few months and stretch the limits of existing working practices."
The number of property transactions registered in England and Wales jumped 27% between November and December 2020 as conveyancers rushed to help buyers beat the stamp duty deadline, according to the latest data from Search Acumen.
The final month of 2020 saw 73,142 completed transactions logged by conveyancing firms, up from 57,632 in November 2020.
Search Acumen’s analysis shows conveyancing volumes jumped 14% in the last quarter, rising to 192,063 in Q4 2020, up from 169,143 in Q3.
The uptick in demand in the property market resulted in firms benefiting from stronger trading conditions. The number of active conveyancing firms continued to recover from the troughs of the first pandemic-induced lockdown, increasing by 58% to 3,808 in Q4 from a low of 2,411 in Q2 2020.
However, despite the recovery from the early stages of the pandemic and the closure of the UK property market, the number of active firms in Q4 2020 is still 3% lower year-on-year. It also remains lower than at any point during the pre-pandemic period over the last decade from Q2 2011 to Q1 2020.
The average number of monthly transactions for the typical firm rose 47%, up to 50 in Q4 2020 from 34 in Q2 but remained 20% below the pre-pandemic levels of Q1 2020 when firms averaged 60 transactions per month. Barring the pandemic period, the Q4 2020 figure represents the lowest level of business seen since Q3 2013.
Even with the year-end recovery in conveyancing activity, annual business volumes have remained acutely impacted by the disruption caused to the property market by the pandemic.
680,232 completed transactions were registered in 2020, compared to 958,243 in 2019, representing a 29% fall. The average conveyancing firm completed 190 transactions in 2020, compared to 240 in 2019.
According to Search Acumen’s analysis, Q4 2020 volumes were down 28% compared to Q4 2019 across the whole of the market. Firms that ranked 51st to 100th were most insulated from the decline as their activity dropped by a relatively small 6%.
The top five conveyancing firms by volume of business retained a 6% combined market share, despite their activity levels remaining 16% lower in Q4 2020 compared to Q4 2019.
Andy Sommerville, director at Search Acumen, commented: “This latest data reveals how much more resilient the property market has been to pandemic-induced shocks compared to the wider economy.
“The surge in activity in the property market can be largely attributed to buyers rushing to capture the savings on offer through the higher stamp duty threshold. Demand has also been stimulated by a change in consumer appetite for properties outside of cities with access to green spaces, as more people than ever before are working from home.
“The stamp duty deadline has put enormous pressure on the conveyancing industry and the traditional processes underpinning much of it, not to mention putting lawyers’ stress levels and patience to the test. This capacity crunch is set to escalate over the next few months and stretch the limits of existing working practices. The conveyancing market is crying out for innovation to better respond to consumer demand.
“For too long the property market has had to rely on traditional ways of working that are a hangover from the last century. It is time to move away from creaking processes and equip lawyers with the data and technology to fully embrace a digital approach to completing due diligence requirements quickly and accurately. Innovation can not only address the current delays in the system but make the industry more robust in the long term.”