"Over much of this decade, we have witnessed a clear consolidation of conveyancing business at the top end of the market"
Search Acumen's Conveyancing Market Tracker shows a consolidation of activity at the top of the market as bigger conveyancers take more business at the expense of those at the bottom of the legal property ladder.
The total number of conveyancing firms active in the market dropped 1% over the quarter (4,144 to 4,100) and by 2% year-on-year, the lowest figure since Land Registry began publishing the data in 2011.
This continues a trend that has played out since 2011 where the number of conveyancing firms active in the market has dropped by 15%, with 700 firms disappearing as a result of mergers, acquisitions, periods of dormancy or exiting the market altogether.
Smaller conveyancers have been the greatest victim of market consolidation over the last five years, with the number of firms handling up to 25 transactions a month falling by 10% from 3,662 to 3,278. At the same time, firms handling more than 50 transactions per month have increased by 31% over the same period, from 268 to 353.
The remaining larger firms are now taking the lion’s share of increased transaction volumes.
Average monthly transaction volumes have increased by 20% in just five years, growing from 50 transactions on average in Q3 2013, to 60 in Q3 2018.
However, despite this 20% growth in average transaction volumes, firms outside the top 1,000 have only seen 9% growth on average during that period as the bigger firms have enjoyed greater long-term gains.
Additionally, despite economic uncertainty causing a 3% decline in transactions in 2018, firms at the top end of the market have maintained their business levels.
Andrew Lloyd, managing director of Search Acumen, commented: “Over much of this decade, we have witnessed a clear consolidation of conveyancing business at the top end of the market. Technology has been a big driver in allowing smarter firms to steal a march on their rivals, which in turn means that the smaller, local conveyancers have struggled as market consolidation bites. They have seen their margins squeezed, local business networks shrink and opportunities to find new business diminished.
“In contrast, larger firms have been able to take advantage of market consolidation as more cases come their way. They have geared up their businesses and continued to grow over the last five years even as the market’s growth has slowed from the heady days of 2014-2016. Others have seized the opportunity to enter the fray for the first time with new propositions or aligned themselves with former rivals through mergers to stem the tide.
“The wider political and economic landscape means the shape of things to come in terms of transaction volumes is to some extent still anyone’s guess as we approach the end of the year. What is clear though is that conveyancing consolidation looks set to continue. The task ahead for the established leaders and aspirational ‘challenger’ firms is have a clear plan to prosper in the face of a potential weakening market. They cannot simply rely on transaction volumes increasing year-on-year, so will have to work smarter and deliver better, faster and more transparent services to give customers an incentive to pick them out of the crowd.”
