Experts Discuss 2019: Price Transparency, AML, Oh And Brexit
Legal service professionals entered 2019 having adapted to price and service transparency regulatory change.
It seemed as though the sector spent huge amounts of time and effort transforming digital communication methods in order to comply with the regulations.
In 2019, this issue is still a talking point with a fifth of Solicitor Regulation Authority (SRA) firms not fully compliant with the changes to price transparency.
The conveyancing sector was also criticised by the regulator after 23% of a sample group failed to fully inform their clients about vital contractual concepts such as distinguishing between freehold and leasehold ownership types.
Throughout 2019, anti-money laundering has also become an important consideration for legal service practitioners as criminals look to channel illicit funds through UK property.
Again, regulators were concerned with the robustness of many law firm procedures.
The SRA highlighted potential failings with 172 law firms sanctioned for anti-money laundering non-compliance leading to 40 solicitors being struck off or voluntarily leaving the roll.
After 400 SRA regulated law firms sent the regulator examples of their compliance with the 2017 Money Laundering Regulations, 21% were deemed to be severely failing in their policies and procedures with risk assessments lacking individuality.
As compliance obligations are set to increase in January following the enforcement of the updated EU Money Laundering directive, the SRA have instructed 7,000 law firms to confirm their compliance and have scheduled more visits in the year ahead.
Property fall throughs plagued the property sector once again with the Government claiming £270 million is lost by sales collapsing before reaching completion.
And then there was Brexit! The driving force behind a ‘wait and see’ buying and selling culture resulting in fewer buyers and reduced housing stock. The harbinger and catalyst for the declining UK construction sector, fewer new homes being built and the reason property prices slowed.
2019 has undoubtedly been a year of challenge but has also been a year of resilience and growth. Industry experts have offered their unique insights into the challenges and personal/business successes enjoyed in spite of the difficulties.
Today’s Conveyancer asked just what have been the most challenging changes in 2019 and how have they impacted the conveyancing sector? Can you offer insight into any positive changes to come out of 2019?
Brian Rogers, Regulatory Director and Head of Content & Thought Leadership at Rilliance, commented:
“All the changes that have taken place from a regulatory perspective can be used, as long as the firm has adopted them properly, to show clients, regulator, insurers, lenders, etc., that the firm takes compliance seriously and that it can be seen as a trusted advisor, rather than just a firm that takes a ‘tick box’ approach to protecting clients.”
Paul Sams, Partner at Dutton Gregory, commented:
“Two of the big issues, as they have been so “fiddly” are in relation to section 8 regarding leasehold properties and section 121 of the LPA 1925 regarding estate charges.
“The general mass media have not helped on either by demonising leasehold properties in particular. Only a small number, in reality, are affected, but just like chancel repair I fear that the same has been blown out of all proportion.
“Conveyancers have done what they often do and have been in panic over the issues without considering the same clearly. For starters, neither is an issue if your client pays! Common sense goes a long way. Given that legal indemnity insurance can be purchased relatively cheaply for both issues clearly this shows how much of a risk/issue the insurers view the same with.”
Miles Shipside, Director of Rightmove, commented:
“The greater certainty afforded by a majority government gives an opportunity for a more active spring moving season, with some release of several years of pent-up demand. Given the Brexit track record to date, further political twists and turns should not be ruled out, though with a large majority there is a higher possibility of an end to the series of Brexit deadlines, and the prospect of an orderly resolution.
“With much of the political uncertainty removed, we expect that the number of properties for sale will recover as more new sellers come to market, making up some of this year’s lost ground. However, property supply is still limited, with estate agents having the lowest proportion of properties available for sale in two years, and this will fuel modest gains in the national average asking price of property coming to market.
“The fundamentals remain sound with low interest rates, lenders competing to lend, high employment, and average wage growth outstripping house price growth and helping buyer affordability. The statistics for 2019 encouragingly show that the ‘have-to’ and ‘life-stage’ markets have been carrying on, and we hope that the more certain outlook would encourage many would-be discretionary movers to finally get off the fence.
“First-time buyers are the drivers of the market. Too many are struggling to save the necessary deposits, and not all of them want to buy a new-build home through Help to Buy. More ways of getting more people onto the ladder would help to limit rising rents, increase liquidity and transaction numbers in the housing market, and make the dreams of their own roofs above their heads a reality for many more of the younger generation.”
Guy Gittins, Managing Director, Chestertons, commented:
“If there’s one thing that slows the property market more than anything, its uncertainty and this morning, two big uncertainties have been removed: we will have a Conservative government for the next five years and we will be leaving the EU, with or without a deal.
“We more or less know what is in store with regard to policies affecting the housing market: it is unlikely that tax cuts on property will be high on the agenda for the immediate future given their proposed spending plans in other key areas such as health, education and policing, but the more extreme plans of the other political parties such as rent controls are no longer on the table.
“We expect that the considerable pent-up buyer demand which has been waiting for Brexit clarity will now be released. Sellers will in turn be encouraged by the increase in demand and are likely to start putting their properties on the market in greater numbers and the increase in sales could see prices bounce back quite quickly. We have already seen how quickly confidence can rebound with the pound surging to its highest level since June last year and the FTSE 250 hitting record highs, and buyers should consider acting sooner rather than later while prices are still at attractive levels compared the last market peak.”
What changes do you predict for the year ahead?