The Ultimate End of Year Outlook and New Year Predictions

The Ultimate End of Year Outlook and New Year Predictions

2014 service provision

2014 is being hailed by industry leaders as the year for communication and innovation. After the great success in 2013, conveyancing firms have had to up their game, as consumers demand better communication from legal professionals, with regular updates and quicker transaction completions.

Nick Masheder, Managing Partner of Beaumont Legal says, “Over the past year the focus has been on how to maintain not just the quality of service that was provided before the downturn, but the quality of service clients now want.

“Customers now want more updates more regularly and chase more often than they did before the economic downturn because they want their transaction to complete more quickly.”

Conveyancers reacted to these changes in service provision with enhanced training and by encouraging innovation within the sector, which has been a key focus for Beaumont Legal.

Nick added, “[Beaumont Legal] invested £150,000 in a dedicated Training Academy this year to ensure that everyone within our firm has the support they need to become quality conveyancers, whether they wish to pursue formal qualifications or not.”

Doug Crawford, CEO of myhomemove, states, “Responding to changing customer needs requires constant innovation.”

He advises, “Most clients of consumer legal services are infrequent users and their expectations are driven as much by what they are used to in other sectors as it is by any historic experience of using a lawyer. The current challenge that the legal sector faces is how to deliver what many consider a traditional service across the backdrop of consumer expectations of speed, communication, visibility and value for money, particularly in the online space. It is essential that innovation in the legal sector is benchmarked against the online customer experience [of leading] retail outlets.”

Some conveyancing experts say the added pressure to maintain transaction levels combined with increased professional indemnity insurance (PII) premiums could see many firms leaving the conveyancing sector entirely.

Doug says, “Many believe that 2015 will see a number of firms leave the conveyancing sector, having had a reprieve due to a buoyant transactional market in 2014. The effect of this will be heightened by increasing professional indemnity insurance premiums and changing consumer behaviour and needs.”

Property Price Overview

Following the boost in the property market in 2013, Eddie Goldsmith, Chairman of the Conveyancing Association commented that this time last year, there were doubts as to how the market would change in the foreseeable future. He states that residential property prices have risen substantially, and in 2015 he predicts we should expect to see further growth by as much as 6.5%.

“Firstly what a year 2014 has been.” Eddie commented.

“We end the year with prices having risen considerably and although we do not expect to see that kind of growth next year, I think we can still expect sustained growth in most areas of the country.

“Those offering a conservative estimate for growth in 2015, estimate prices will increase at a rate of 5%. A more bullish estimate is as much 6.5%. Despite the prospect of an increase to interest rates, forecasts predict that over the next five years prices are due to grow by between 20 and 30%, depending on the area, so we do have reason to be cautiously optimistic.”

Government Reforms

In terms of the Government stance, 2014 was the year of increased support to home buyers. We saw a major stamp duty reform, as well continued strength of schemes such has Help To Buy. This has opened up the property ladder to a wider scope of UK property seekers, and the conveyancing sector has seemingly benefitted.

“The recent stamp duty reforms and the continuation of the Help to Buy scheme have broadly been welcomed changes.” says Eddie.

“[These changes have been] helping to get more people onto the ladder, reducing costs and particularly benefiting most those looking to buy outside of London. From the conveyancing side there’s been a good uptake of Help to Buy with a decent number of new-build transactions too.”

Doug concurs and believes the stamp duty reform will bring positive changes within the New Year.

“Despite the uncertainty of the 2015 housing market, there are a number of reasons to be optimistic in the New Year. We believe the Stamp Duty Land Tax reforms announced in the Autumn Statement will have a positive impact from Q1 as house hunters – in particular first-time buyers – will have greater funds available for deposits.”

He continues by offering an outlook on future schemes and how this will work to further improve the residential property market with a boost in housing supply.

“Often housing supply is seen as a limiter, however there has been increasing pressure from the Government for builders to build. The Starter Home Initiative, which will see 100,000 new homes built for first-time buyers at a discounted price, together with the existing Help to Buy scheme, will ensure that builders are encouraged to increase supply.”

Interest Rate Focus

Interest rates have been a focus in 2014, and experts are predicting this will continue into 2015. Some say there could be further changes brought in, but hopefully not too soon.

Eddie commented, “Interest rates have been hotly debated this year and I expect nothing will change in 2015. Earlier this year for many it looked like a rate hike was just around the corner. But the fact that wages are still lagging behind prices means that we now don’t expect any changes to interest rates until much later in 2015 – I suspect until well after the general election. I tend to think this is a good thing, I fear many people are still over leveraged on their homes and rate increases too soon could jeopardize the market.”

Doug says, “Despite the indication by the Governor of the Bank of England, Mark Carney, as far back as March this year that interest rates would rise by the end of 2014, it looks like he was a full year out and we can now expect this to happen towards the end of 2015. We expect rates to move to 0.75% in Q4.”

Effects of the General Election

With the General Election looming, expect to witness a surge in completions at the beginning of the New Year, followed by a slowdown.

“We can’t forget that we have a General election in May. They always have an impact on the housing market.” Eddie recalls.

“Given the uncertainty this time about which party or indeed parties will be in power following the aftermath, experience suggests this will have an impact on transactions. The start of the year is likely to see a dash to get completions through and then a significant slowdown in the lead up to polling day, as demand tales off and buyers decide to wait and see what kind of government emerges.”

Doug says, “A number of dynamics are at play; many of our corporate partners are predicting a flat market for next year, largely due to the uncertainty that the general election in May will bring.”

What 2015 will bring

2015 could be the year the property industry aim to work together more effectively, as this is becoming the ever-prominent bugbear for many property professionals. The next step is to enhance the conveyancing sector and work in partnership with essential third party businesses.

Nick advises, “In the next year the focus on quality and speed is only going to build, as is the need for everyone in the industry to work together. Conveyancers, estate agents, lenders and brokers are all working to get clients into (or out of) their home as soon and as smoothly as possible, so we need to move away from the “them and us” mentality that often exists.”

Further changes within the property industry include the widely speculated launch of Veyo in spring and the introduction of the new online estate agency, OnTheMarket.com in late January. What these new additions will bring is anyone’s guess, but Eddie is curious as to the potential outcomes.

“The Conveyancing Association recently had a presentation on the latest developments of the portal [Veyo] and its capabilities. It certainly seems an interesting prospect which could potentially benefit the sector.”

Eddie continued, adding, “Veyo has set itself a tough deadline to be ready for the first quarter of 2015, and the industry is keeping its powder dry until we see the final product. The test of success is whether conveyancers see there are benefits for their clients in using the new system and whether it will deliver what it promises, namely speedier transactions.”

Doug concludes, “[myhomemove] would prefer to see the glass as half full rather than half empty, and to that extent believe we will have a relatively stable housing market, with low interest rates and competitive lending which will ensure a safe range of house price inflation – albeit with the usual regional variations as we have done with London cooling, which has not been a bad thing. We will of course be able to see if our forecast is on track as the date for our 2015 conference has been announced to be one week after the general election.”

 

Georgia Owen

Georgia is the Content Executive and will be your primary contact when submitting your latest news. While studying for an LLB at the University of Liverpool, Georgia gained experience working within retail, as well as social media management. She later went on to work for a local newspaper, before starting at Today’s Conveyancer.

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