A report from legal technology specialist, Access Legal, that analyses transactional and business data of almost 5,000 firms practising conveyancing, has revealed how the top end of the market continues to grow its share of property transactions.
The conveyancing landscape: Data trend analysis and industry expert views on the conveyancing sector by Access Legal, shows that the conveyancing market was the strongest in 2021 than it’s been in more than a decade, with residential purchase cases exceeding 1 million for the first time since 2007 - largely thanks to the SDLT (Stamp Duty Land Tax) holiday.
This demand saw new market entrants with an increase in the number of conveyancing firms, year-on-year, for the first time in almost a decade. Of the nearly 5000 active firms in the market in 2021, only five firms completed more than 5,000 residential purchase cases and only one firm completed more than 11,000. The overwhelming majority of firms complete less than 250 transactions a year (84 per cent) and 59 per cent of active firms complete less than 100 residential purchase cases.
The top 50 firms were responsible for more than 21 per cent of all residential purchases and the top 500 for nearly 60 per cent. By comparison, the smallest 2,822 firms (60 per cent of all firms) account for only 10 per cent of transactions - showing how crowded the bottom end of the market is.
My Home Move remains the dominant force in the sector. There are also other large firms who are active across multiple regions, such as O’Neill Patient Solicitors, Countrywide Property Lawyers, Setfords Solicitors, Taylor Rose and Martin Tolhurst that also have a large share of the market.
Speaking on the data in the report, Mike Connelly, commercial director and founder of Legal Bricks, part of Access Legal said: “Our data shows the polarisation of the market with the number of larger firms increasing their transaction volumes over this period, whilst the number of small firms completing transactions, decreased considerably.
“Over the past two years, we’ve seen a huge shift in the way law firms have had to operate and service clients. Many of the larger law firms are likely to be able to embrace new technology, enabling them to work more agile, and move to a hybrid way of working quicker than many of the smaller law practices.
“It’s notoriously difficult for sole practitioners, limited partner firms, and generally smaller law firms to be accepted by some lender panels, which leaves them with limited options outside of appointing additional partners, should they wish to grow.
“It’s already clear that the road ahead is different for 2023. Inflation and the cost-of-living crisis are currently at the forefront of everyone’s mind, with it really starting to hit people’s pockets, and the Bank of England has increased the base rate several times. Should we see further increases, it’s certainly going to impact the market and I’m already hearing that transaction fall through rates are on the increase again.
“The good news is we’ve seen that lenders are taking a more pragmatic approach, and mortgage rates have fallen despite the base rate rises. This will hopefully provide green shoots of positivity for the market and conveyancing firms of all sizes will see activity again pick up heading into Spring 2023.”
More than 3,800 UK law firms currently benefit from Access Legal solutions, and its client portfolio includes The MAPD Group, Minster Law, Winn Solicitors, Wolferstans, BHP Law and Neves Solicitors LLP. Access Legal is planning to release a data trends insight report in the summer of 2023, delving into the performance of the sector through 2022.
Copyright © 2023 Legal IT Professionals. All Rights Reserved.