Whilst the majority are looking to polish off the last of the annual festive indulgences we are able to get away with at this time of year, many will be reflecting on 2019 before speculating about the changes set to take place in the decade ahead.
The conveyancing sector has adapted to a multitude of change throughout 2019.
From price and service transparency through to the newly adapted standards and regulations, law firms are becoming adept at updating their processes and approaches in order to comply with regulatory change.
Furthermore, the next decade will see the enforcement of the Fifth Anti-Money Laundering Directive and updated regulations for homes using septic tanks.
Will 2020 be the year of regulatory compliance on a scale never before experienced in the sector?
Consumers are also driving changes, attributed by a culturally ingrained ‘Amazon effect’. 80% of firms anticipate technology to be one of their priorities over the next 2-3 years as a way of ensuring growth, according to data obtained from ‘The Law Firms’ Survey 2019’.
The research also found that 100% of the top 100 law firms had experienced a cyber attack in 2019. As the SRA continue to send out hundreds of scam alerts each year, the sector will need to prepare itself for a continual barrage of digital crime attempts in 2020.
Finally, conveyancers have braved a cautious ‘wait and see’ property market as a general election and Brexit damaged the UK economy. What impact will Brexit continue to have on the sector?
Paul Sams, Partner at Dutton Gregory, commented:
“Personally, I am cautiously optimistic for 2020. We have a Government with a majority that like them or loathe them, now have the ability to pass legislation. Whilst not wishing to rake over the many sides of Brexit once it has happened, we can all get on with our lives.
“Too many times I have heard clients, agents and developers use that as an excuse to not do anything. I listened to a radio interviewer with a surveyor the other day where he suggested the market would do well in 2020 when uncertainty was banished. Given that surveyors are generally negative by their very nature the positivity genuinely shocked me. Giving a positive clear message, like our more successful politicians is clearly the way to go.
“18th century English philosopher Edmund Burke , wrote:
“’Because half a dozen grasshoppers under a fern make the field ring with their importunate chink, whilst thousands of great cattle, reposed beneath the shadow of the British oak, chew the cud and are silent, pray do not imagine that those who make the noise are the only inhabitants of the field.’
“I expect to see technology playing a bigger part in the housing market as we enter the next decade. When I can order something from my smart phone and expect to receive it the same day, it won’t be long until consumers expect that in conveyancing.
“We are already seeing the benefits in my firm of using the likes of integrated InfoTrack systems into our case management system. I have seen some great new “add ons” from various technology companies in the past few weeks. I have done most of my Christmas shopping from my smart phone (in fact all of it!) so that is what most people will want with their conveyancing I expect moving forwards.
“I was told the other day on a matter that my replies to legal enquiries were with someone’s secretary for typing up. They had received the enquiries for eight days, with the clients I have, eight minutes is too long to have not progressed matters and a lot of them will expect it quicker than that.
“With the almost daily attempt to “phish” for details to try and commit fraud against our clients and the constant threat of cyber-attack, the need to rush to use new technology does need to be weighed up against the constant need for vigilance. We all, as a profession, need to work together to protect ourselves and our clients from fraudsters, but seriously people, this obsession with believing that using the 1980’s “yuppie” fax machine for protection needs to end because my eight year old can hack a fax. Cyber security is clearly getting better though given the fact that many fraudsters are resorting to cheque fraud as people are not au fait with cheques anymore!
“Going back to my first points, I know that Brexit and investment in the NHS seem to be top of the list for Boris Johnson’s new administration but if they could spare a few minutes to resolve the section 8 issue surrounding long leases and the perhaps more rampant issue of section 121 of the Law of Property Act regarding rent charges with a couple of simple lines of statute, the conveyancers of this country would surely thank him, even though some may do so through gritted teeth.”
Brian Rogers, Regulatory Director at Rilliance, commented:
“The key issues I think those in the property sector will face in 2020 are:
- Referral fee ban – the government may decide to ban property referrals due to a lack of transparency by estate agents; if this happens then income for referrers will dry up and law firms will be left having to look at how they can market their services where introducer choose to send work elsewhere as the level of referral fee paid would no longer have any relevance
- Money laundering – law firms are part of an ongoing thematic review being undertaken by the SRA looking at AML compliance; based on previous review data many could be found lacking and referred for enforcement action
- CQS – with the introduction of the SRA Standards & Regulations it is likely the CQS Core Management Standards will need to be updated, so firms need to keep an eye on this, especially as CQS are assessing compliance more closely.”
Tom Bridge, Head of Residential Conveyancing at Ramsdens Solicitors LLP, commented:
“Whatever your political opinions may be, the result of the general election has provided some much needed certainty both in terms of Government policy and the economy in general. We now know that Brexit will happen with or without a deal and the immediate aftermath of the vote has provided an indication that certainty will filter through to business positivity. This should mean that the outlook for the housing market in 2020 is much more positive than prior to the election as consumers generally have more certainty about how the Government intend to deal with Brexit and the economy in general.
“Hopefully, this will translate through to higher transaction volumes next year as people gain more confidence that things are progressing and they can plan ahead with more certainty than previously. Volume of transactions has a direct impact on the confidence of conveyancing firms to recruit / retain staff and therefore provide capacity to service work.
“It is also to be hoped that a Government with a significant majority will provide a more consistent approach to housing policies generally and in particular will now proceed to tackle long standing issues centred around the debate related to leasehold properties / escalating ground rents/ rent charge etc.
“The forthcoming new AML directive will bring fresh challenges for conveyancers but past experience perhaps shows that the industry has a habit of coping with such changes and most firms will adapt and develop their approach to deal with the requirements of the new directive.
“Conveyancers will need to continue to meet the ongoing challenge of client / introducer pressure to provide better customer service and communication utilising technology developments.”
David Cox, Chief Executive, ARLA Propertymark, said:
“For far too long, successive governments of all political persuasions have passed significant amounts of complex legislation for landlords. As a result, much of this year has dampened landlords’ appetites to invest and expand their portfolios, with many consolidating their assets, or choosing to step away from the sector altogether. This has impacted tenants most, who have restricted supply and have been faced with less choice and paying higher rents.
“Looking ahead to 2020, we hope the Government recognises the importance of increasing supply for tenants and uses it as an opportunity to make the market more attractive for landlords. This will encourage more landlords back into the market as well as ensure that tenants, including those who are most vulnerable, are not at a disadvantage in being able to find a suitable and affordable home to rent.
“Change should make the PRS fairer for all involved, and not penalise those landlords who provide high quality, affordable housing for thousands of tenants. Propertymark’s Election Manifesto outlines a number of urgent housing reforms we hope the new Government will take forward to improve the sector, particularly regulating property agents through the recommendations of RoPA– the Regulation of Property Agents working group.”
Mark Hayward, Chief Executive, NAEA Propertymark said:
“The changing political landscape throughout 2019 has undoubtedly caused uncertainty in the housing market, which in turn has affected sentiment and decision-making. Once the current political impasse is resolved and it’s clear how and when we’ll be leaving the EU, we hope there will be a degree of certainty which may trigger a flurry of activity.
“Regardless of the colour of the new Government, housing must be a priority. A clear strategy is needed to tackle key issues such as stamp duty costs. Additionally, we’d like to see the Government commit to bringing regulation into the sector as soon as they can in the New Year and to consider the introduction of digital logbooks to allow for a more interactive, streamlined and transparent process for home buyers and sellers. The housing market needs reassurance from the Government, which will in turn inject some confidence in the market for both buyers and sellers.
“Despite the difficult year, the UK property market remains a strong sector overall, and has demonstrated a huge amount of resilience in the face of political turmoil. We hope for a more certain outlook and some stability in 2020, which is hopefully provided sooner rather than later.”
What will 2020 offer the conveyancing and property sectors?
