2017: A conveyancing year in review
2017 was an interesting year for the Conveyancing industry. With the rise of digital technology, and with the accessibility of legal services for consumers at the forefront of everyone’s minds, it appears that change may on the horizon.
With the SRA’s consultation, Looking to the Future: Better Information, More Choice, the Government’s Call for Evidence to improve the home buying process and other consultations on the topic from the CMA and CLC, it is clear that improving the process for both consumers and professionals within the industry is on the agenda.
One of the more controversial areas here was the price transparency requirement. If it becomes mandatory for firms to publish their pricing, this could lead to increased competition in the market.
More generally, a move to publish more information online for consumers means Conveyancers must get ahead of the game and ensure they are monitoring their brand online. With the rise of online reviews, it is becoming increasingly important for information online to be up to date and presented in the right way for consumers.
2017 also saw the delivery of the Autumn Budget, announcing that stamp duty for first-time buyers purchasing homes worth up to £300,000 has been abolished. Chancellor Philip Hammond has announced the abolition of the tax in a bid to help those trying to get on the housing ladder.
Whilst first-time buyers were happy with the result, it raised concerns over whether this would, in turn, lead to an increase in house prices.
Towards the end of last year, the case of Brabner’s v The Commissioners for HMRC concluded that search fees should not be treated as disbursements and are therefore liable for VAT to be charged. This was based on the fact that the firm prepares a separate report on the search results and is, therefore, using the information from them ‘as part and parcel of its overall service’.
Since this time, many Conveyancers have been seeking advice on how to deal with various disbursements now. The HMRC confirmed that CON29s should be VAT applicable, leading to councils preparing to charge VAT on searches next month.
Stamp Duty changes for those set to buy a home in Wales were announced. According to the Welsh Government, the changes are set to reduce the stamp duty owed by nine out of ten buyers – however, they could also result in some buyers having to pay a higher sum.
On a positive note, 2017 also saw a rise in awareness around fraud, with firms taking active steps to protect themselves from the risk. However, cases such as Dreamvar v Mishcon de Reya highlighted that risk in the industry is still prominent, with the decision reached in this particular case putting conveyancers on high alert. The Risk Outlook from the Solicitors Regulation Authority further drew attention to the importance of client money protection, setting out sanctions for firms that do not take preventative steps. As a way to help prevent email modification fraud, for example, the regulator suggested that firms consider using systems such as Lawyer Checker to verify that the third party is genuine. Whilst mistakes can happen, reporting incidents to the regulator is vital; not only does it minimise the damage to the firm, but it also protects other firms from being affected in the same way.
Following an eventful year, it will be interesting to see the results of the SRA and Law Commission proposals, as well as the reaction from the profession. Here at Today’s Conveyancer, we’re looking forward to seeing what 2018 will bring.