Daniel Morris is Director of Box Legal, an After The Event (ATE) Insurance Broker which has just launched a new product — MoveSafe — to the conveyancing market. Box Legal has conducted a poll of 2043 people through Populous revealing that 80% of people are concerned or very concerned about wasted charges in conveyancing and 77% think their solicitor should be offering them insurance. Today’s Conveyancer spoke to Daniel about the products Box Legal is offering conveyancers and why he thinks they will benefit the market.
Why have Box Legal moved into the conveyancing market Daniel?
‘Myself and my colleague are solicitors and we ran a large litigation department in the city before setting up Box Legal ten years ago, selling ATE insurance to solicitors. We believe we have 10-15% of the market so we’re not new boys on the block. We have a lot of experience with legal insurance and a lot of firms on the litigation side who use us.
This is our first move into the conveyancing market but it works on exactly the same principles we’re geared to — there’s a win or not a win; a completion or not a completion. It’s black and white. We spotted an opportunity to provide failed transaction insurance to conveyancing firms which benefits clients and solicitors alike and so decided that we would turn our experience of insurance to a different market.’
What is MoveSafe?
‘We launched MoveSafe two months ago. It is a smart product which covers a solicitor’s fees and disbursements plus the client’s survey and other charges when buying or selling a residential property. The clever bit is that, although the client takes out the insurance at the start of the transaction, they only pay the £87.03 premium at completion. If completion fails to take place, they don’t have to pay anything! At that point of course, the solicitor makes a claim and recovers their fees, disbursements and the clients’ survey charges.’
What has the reaction been?
‘At the moment — most solicitors are thinking about it although we do have several firms in the process of signing up. Many firms are telling us they’re really busy so they don’t have time for any additional work. The good news, however, is our systems are all automated and can link with solicitors’ case management systems, meaning there is little if any additional administration work.
Solicitors are also concerned about making their processes more expensive when they’re doing their quotes because conveyancing is a competitive market at the moment. But this product is covering the client and the solicitor — lots of solicitors are being forced to write off their fees if completion doesn’t take place. And we’re saying to them — you don’t have to do that because MoveSafe would cover you. So it’s extra profit for solicitors and it’s getting clients their money back if a house sale falls through — all the money they’ve spent on the main survey and then additional asbestos surveys, for example, if they’ve been done. It’s a win-win for solicitor and purchaser/seller.
It’s early days — I think it is a bit of an educational thing. A couple of the big search companies are interested because they want to offer additional products to their users. It’s just a question of educating people that this is available and that the clients want it and that it’s of benefit to solicitors as well.’
Why did you commission the survey?
‘To prove to conveyancing solicitors that clients want insurance in the home-buying process — to highlight the appetite for it. Solicitors were wary when we launched MoveSafe but when we spoke to people who were going through the house buying process — friends and family — they said that’s a no brainer. So there was a bit of a dichotomy between what the solicitors wanted and what the clients wanted — solicitors were second guessing the clients a bit.’
Did the results surprise you?
‘I’m pleased the survey came out as it did — it’s what I expected — but I was surprised the numbers were as high as they were. Concerned and very concerned about wasted charges when buying homes was 80% is pretty high. And 82% of the people surveyed would be likely to consider buying the policy. Well that’s even higher.
So now, when solicitors say: ‘I don’t think my clients want it’ — we can say that this isn’t correct.
We saw a firm recently — one of the large ones — and their attitude was we offer a ‘no completion — no fee’ service’. I said: ‘What happens to the disbursements?’ And the firm said we’ve had that money on account so the client’s already paid. And that’s exactly it — that’s the concern. The solicitors might write off their costs but the poor client doesn’t — they could lose £700 and then have to spend it again when they buy their next property because the first one fell through.’
Would you agree that there is a lot of financial pressure on conveyancers at the moment?
‘Absolutely — it’s a pile it high and sell it cheap sort of industry right now. Certainly price pressure is a big one — clients seem to be driven by price and everyone likes a good deal. For a lot of people £100 is still a lot of money and if you can get something £100 cheaper down the road you’ll take it. Traditionally conveyancers used to see every client but now it’s all done remotely so you can be undercut by a firm 100 miles away.
So if you can’t put your price up how are you going to make more money? Obviously you could do more transactions but there’s a limit to that with your staff. Suddenly firms need staff and they have all been laid off in the recession. And the resources and investment aren’t there —firms haven’t been able to invest in their systems as much as they would like. How about getting paid then for the 5% of transactions that fall through? Wouldn’t that help a bit? That’s what our product does.’
And what do you think conveyancing solicitors are getting right?
‘Buying a house is a stressful time for a client so getting the service is right is important — it’s not necessarily the legal stuff but often the service stuff that clients will judge conveyancers on. If someone asks for a recommendation of a good dentist, you don’t know who does the best fillings but you do know who has the comfiest waiting room and the friendliest receptionist — it’s the same in conveyancing. Everyone expects solicitors to get the legal stuff right — that almost goes without saying. The way they differentiate between them is down to what their website looks like and the price. And some firms do the service side very, very well indeed. They answer the phones quickly, respond to emails and keep clients informed. I think firms that don’t embrace technology will struggle as this is an integral part of being able to offer a fast and efficient service.’
There’s a lot of talk about interest rate rises – how do you think that will affect the property market?
‘I can’t see the rise being a big one as the economy won’t take it but a correction is going to be needed fairly soon. I suspect however that London and the South East aren’t going to be affected too much by a 0.5% rate rise. A lot of sellers are hanging on, thinking — why sell now if I can get another 10% by waiting 12 months and have to compete with 50 purchasers on my next property? A rate rise may perversely flush out sellers. If a small rise causes the number of purchasers to drop then prices will stabilise a little and this may encourage sellers to think ‘now is the time’.
Obviously you’re London-based. Do you think the property bubble there is sustainable?
‘I think it’s looking a little dangerous and is pricing locals out of the market. There are far too many foreign investors who are seeing London as a dead cert way of making money. It may be that foreign investors need to be penalised with much higher stamp duty or other disincentives as otherwise I can see the bubble bursting at some point. It’s not sustainable in the long term.’
What percentage of the conveyancing market would you like to sign up to MoveSafe?
‘It’s a very big market and I would like 5-10%. I don’t think that’s unrealistic given we are looking at the big firms and talking to referrers of work — estate agents and so on. It’s all moving in the right direction. It’s a slow process because some firms are big so you have to speak to a lot of people before decisions are made but we’re getting there. We’re doing various CPD road shows this autumn to talk to solicitors en masse and we’ve launched a conveyancing blog on our website. We are also setting up a separate website called My Moving Story where people can share stories of their good, bad and nightmarish house buying experiences. So we’re getting our message and our name out there. In addition, we are looking to raise awareness of our products with the general public and at advertising on Rightmove. The survey showed that 77% of people want solicitors to offer these sorts of products and so we are going to tell the public to ask their solicitors for them. I think products such as MoveSafe will be widespread in a few years, just like Chancel Check insurance, which appeared a few years ago, is now.’
To request more information on these products click here.
