Posted by Nick Dyoss, business development director at Legal Futures Associate tmgroup [1]
[2]Dyoss: potential for significant change for the conveyancing market
When trying to predict the coming year, it is often best to look at the past and presume it will be the same. Not a particularly eye-catching start to this article but there is little to suggest that a major shift either up or down can be realistically expected in housing volumes.
The economic ingredients that make up the housing market soup are the same as the last 12 months. There persists an undimmed and undoubted desire for people to own their own homes and buyers are still benefitting from a benign interest rate level which looks set to last for most of this year. MMR has remained in place unchanged and despite the government’s high-profile announcement about housebuilding and freeing up the planning process, these measures are going to take a generation to have a material effect.
It is encouraging to see a number of recent surveys showing conveyancer and consumer confidence both on the up and higher than last year, as this suggests that business and personal prospects are improving. However, the government may well be playing Scrooge this year as the austerity plans for 2016 are the equivalent of taking out 0.5% GDP growth per quarter and its much trumpeted stamp duty reforms appear to have killed off transactions at the top end of the market.
So in terms of expecting housing volumes to rise or fall significantly this year, it would seem that the scales are balanced. If this is the case what can we expect?
From 1 February, the CON29 will become subject to VAT, adding 20% – or £60 – to the total cost. Will this lead to a swing towards regulated searches or will the increase be accepted? The one area that will be interesting to watch is its impact upon the plans of the Land Registry.
Another unknown quantity is the impact of the additional 3% stamp duty charge for additional homes, which comes into force in April 2016. Much like the expected surge in buy-to-let purchases with pension freedom last year, I suspect this latest change will pass by unnoticed, which is probably similar to the anticipated surge in Lamborghini sales to pensioners.
Of more material benefit this year will be the planned consultation by the Solicitors Regulation Authority, which is reviewing its regulatory model to give law firms greater freedom to run their businesses as they see fit. There is also the review of the Legal Services Act during this Parliament, before which there will be a consultation on alternative business structures and the government aim to ensure that “new and innovative” (whatever that may mean) companies can enter the market.
So, much like 2015, there is the potential for significant change for the conveyancing market, albeit probably on the back of a familiar number of transactions. Will we see a surge in advance of April or an avalanche of new businesses entering the conveyancing sector? The answer to both is probably ‘no’ and success will continue to be based around a quality customer-focused service – ably supported by tm, of course!
I hope you have a successful 2016.