By Legal Futures’ Associate Search Acumen
- The average number of cases conveyancing firms dealt with in Q4 2018 (65) was the highest quarterly figure recorded since before the 2016 referendum on the UK’s membership of the European Union
- Total conveyancing volumes in the market were up 8% in Q4 2018 from the previous quarter as the industry enjoyed a strong end to the year
- ‘Challenger’ firms experienced the strongest annual growth, as the number of firms that process 100-200 transactions per month grew by 27%
- The number of active conveyancing firms remained near a record low at 4,126, down 10% since 2011
Conveyancers in England and Wales dealt with more cases on average in the last three months of 2018 than in any other quarter since before the EU referendum of June 2016, according to the Q4 2018 edition of the Conveyancing Market Tracker from Search Acumen, the property data insight and technology provider.
The tracker – which monitors business performance and competitive pressures in the conveyancing market – shows that conveyancers enjoyed a strong finish to the year, even as the number of active conveyancing firms remained near a record low.
Firms defy Brexit malaise to record average case completion highs
The average number of cases (65) conveyancing firms dealt with during Q4 2018 was the highest figure recorded since before the 2016 referendum and has only been bettered on three occasions since 2011 (in Q4 2014, Q4 2015 and Q2 2016). As a result, the average firm processed 26% more transactions in Q4 2018 than five years earlier and 10% more year-on-year.
The average number of cases conveyancing firms dealt with in Q4 2018 was also the strongest seen for three years since Q4 2015.
In particular, the top 200 ranking conveyancing firms by volume of transactions enjoyed a busy end to the year.
In particular, the top 200 ranking conveyancing firms by volume of transactions enjoyed a busy end to the year. Average monthly activity among this group jumped by 11% from Q3 2018 to Q4 2018, beating an 8% rise across the whole market.
Total conveyancing activity ends 2018 on a high
Total conveyancing volumes across the market reached 267,438 cases compared to 248,023 in Q3 2018. This was also an 11% annual increase from 241,666 in the final quarter of 2017.
Over a five-year period, growth figures paint an even stronger picture, up nearly a fifth (19%) compared to Q4 2013 when 224,477 cases were logged between October and December.
Smaller firms struggle as challengers enjoy long-term gains
‘Challenger firms’ experienced the strongest annual growth, as the number of firms processing between 100 and 200 transactions per month saw the largest increase year-on-year in Q4 2018, growing 27% from 78 in Q4 2017 to 99.
Looking back at wider trends over the last five years, the number of firms handling more than 100 transactions a month has increased by 70%, with only 83 firms falling into this category five years ago in Q4 2013 while 141 were recorded in Q4 2018.
Meanwhile, the number of firms handling 25 transactions or fewer a month has fallen by 10% from 3,623 to 3,259 since Q4 2013. In contrast, those handling more than 25 transactions per month have increased by 17% from 738 to 867 over the same period. This suggests that the biggest conveyancing firms have been able to not only survive, but thrive as smaller firms fall by the wayside.
Consolidation continues as the conveyancing market evolves
As the number of firms dealing with smaller caseloads decreases, the split of business in the conveyancing market continues to show similar signs of consolidation.
Those firms outside the top 1,000 firms experienced the biggest collective loss in market share over the last five years, with their combined share reducing from 29.2% in Q4 2013 to just 25% in Q4 2018. Even those firms ranked from 501st to 1,000th by transaction volumes saw their market share reduce over the same period.
In contrast, firms within the top 500 increased their combined share of the conveyancing market over the last five years, up from 53.5% in Q4 2013 to 58.1% in Q4 2018.
The overall number of active firms in England and Wales is at its second lowest level on record (4,126), marginally up from Q3 2018 (0.6%) but down 13% since records began.
Andrew Lloyd, Managing Director of Search Acumen, comments:
“While recent headlines continue to cast doubt over the short-term prospects of the property market, it’s great to see that conveyancers in England and Wales have been able to find more business regardless and enjoyed a busy end to 2018. Firms with high growth aspirations have taken full advantage of the increasing activity, ignoring any uncertainties around Brexit and forging ahead to build their market position.
“To some extent, the fact that challenger firms continue to grow in this tough environment tells us that the demise of the small conveyancing firms isn’t a result of the market or of political upheaval – it’s just evolution. Established leaders and aspirational firms have a clear plan to prosper, and are increasingly taking advantage of efficiencies and enhancements driven by technology to build bigger and better businesses.
“Back in Q3 of last year, we noted that the wider political and economic landscape meant the shape of things to come in terms of transaction volumes is still to some extent anyone’s guess. That’s still very much the case as a concrete Brexit solution is yet to emerge from Westminster. But in the meantime, fears of a weaker Q4 haven’t materialized so to assume that 2019 will bring a Brexit downturn may be equally premature.”