2016 sees first rise in number of active conveyancing firms in five years
Search Acumen Conveyancing Market Tracker – 2016 end-of-year edition
- The number of active conveyancing firms in the market dropped by 28% in the last ten years, despite 2016 activity hitting its highest point since 2007
- However, 2016 saw the total number of conveyancing firms registering transactions break a five year downwards trend, rising by 4% from 2015
- The average conveyancing firm also completed 35 more transactions per year than in 2006 – an increase of 22% in ten years – compared to just one more year-on-year
- 2016 was the most productive year in terms of average volumes per conveyancing firm per year since the data was tracked in 2005
- Firms ranked 11th to 20th in the market saw the highest year-on-year increase in activity, reaching 3,782 average completions per firm in 2016, an increase of 11%
During a year that shook the property sector with uncertainty, the total number of conveyancing firms operating in the market broke a five year trend of annual decline, according to Search Acumen’s Conveyancing Market Tracker. In 2016, the number of conveyancing firms rose by 4% to reach 5,572, up from 5,357 the year before.
Despite this annual rise, the data reveals a 28% drop in total firms over ten years, representing an average dropout rate of 213 firms each year since 2006 through both exits and mergers.
The Tracker – which uses Land Registry data to examine competitive pressures in the conveyancing market – has also found that the market completed the highest number of conveyancing volumes in 2016 since the pre-financial crisis peak in 2007.
Despite a year-on-year rise of one transaction per conveyancer per year on average since 2015, the average conveyancing firm completed 22% more transactions in 2016 than ten years ago – rising from 158 in 2006 to 193. This was also the highest number of completed transactions on average per year per conveyancing firm since Search Acumen began tracking the data in 2005.
This comes during a period when the number of active firms operating in the market saw a significant decline and it therefore suggests a significant increase in productivity with more transactions currently being completed per conveyancing firm in the market.
Active conveyancing firms fell by over a quarter in ten years, whilst volumes rose to a record since 2007
The increase in conveyancing volumes in 2016 was driven by firms ranked 11th to 20th in the market who completed 3,782 transactions on average during the year: accounting for the largest annual rise of 11% from 2015. This was also the highest number of average completed transactions to be recorded by this part of the market since the data was tracked in 2005.
Firms ranked 11th to 20th saw the greatest year-on-year transaction in conveyancing volumes
Despite a strong year for firms in terms of conveyancing volume, competition in the market remained stagnant in 2016 with those firms ranked in the top 1,000 retaining their 71% market share for the second consecutive year. However, those at the top have benefitted in the long term with the top five firms seeing the greatest increase in market share in ten years, rising from 2% in 2006 to 6%.
Mark Riddick, Chairman of Search Acumen said:
“2016 was a testing year for the conveyancer – as the market picked up its pace following the introduction of the Mortgage Market Review in 2014, the industry was yet again exposed to a new wave of uncertainty. First came the stamp duty land tax reform, propelling activity to record levels ahead of April to beat the tax hike and then sprung the EU referendum, presenting a threat on the opposite side of the scale. The industry has been tried and tested and our tracker looking at the year in retrospect shows that we have remained resilient.
“The first year-on-year rise in total conveyancing firms since 2011 is an interesting development during a time of economic uncertainty, and can be commended by businesses in all sectors. The growth shows that the sector very much adopted a ‘business as usual’ attitude, disallowing the multitude of obstacles from the ongoing Brexit saga.
“The longer term picture has revealed a shrinking volume of active firms, but this may not be as worrying as it sounds. The number of firms operating in the market might have decreased by more than a quarter over the past decade, but conveyancing volumes are hitting new highs since the financial crisis of 2008. Conveyancers are therefore becoming more productive and are adapting to the challenges in the market to meet the increasing demand for property.
“As we look ahead to the next twelve months, we can by no means predict which path the UK economy will take. However, we can position ourselves to continue our resilience and improve the efficiency of the property market. As we look ahead, conveyancers must expect the unexpected – embracing technology and being savvy to the continuing threats of cybercrime in the industry will help protect our firms, employees and customers during more uncertain times.”
This article was submitted to be published by Search Acumen as part of their advertising agreement with Today’s Conveyancer. The views expressed in this article are those of the submitter and not those of Today’s Conveyancer.