The UK conveyancing sector is contracting at a faster pace than the previous two years of decline.
According to the ‘UK Conveyancing Market 2019: Market Trends‘ Report, UK residential transactions decreased by 6.6% in the opening half of 2019 and is set to fall further in the second half of the year.
This figure has tripled from 2018’s 2.4% decline from the residential transactions in 2017 and is six times more than the 1% market contraction in 2017.
The report attributes the decline in transactions to Brexit confusion, speculating that market conditions may improve in the autumn.
Respondents to the survey cited depreciating confidence in the future when compared to previous reports. Although the sector still remains profitable in the majority of cases, this sentiment has decreased over the course of the year.
55% of respondents believed that they had enjoyed increased work volumes in the year to April and May 2019. However, this figure had decreased from 66% in 2018.
Similarly, although 53% of conveyancers had increased their revenue in 2019, this figures had shrunk from 62% a year earlier.
Over the past five years and since 2015 in particular, the report has found a major shift from house purchase to re-mortgaging as home owners increasingly choose to remain in their homes until market confidence and growth returns.
Given the increased incentives for first-time buyers through stamp duty land tax relief and Help to Buy, a major change has been the continued reliance of this section of the market. Given the increased duty imposed on additional dwellings, conveyancers are now less likely to rely on buy-to-let investment.
Despite difficulties and imminent hurdles in the future, conveyancers remain optimistic about the next 12 months with 55% estimating that their workloads will increase. Whilst this figure has fallen from 62% in 2018, the majority still feel as though the resilient residential market will bounce back.
This sentiment was also echoed in the reports predictions which estimate the sector will grow by 6% between 2018 and 2022. However, the market will grow at a slower pace because house price growth will remain subdued.
Does the report’s findings reflect your firm’s 2019 thus far? Do you the market will improve following Brexit?
