The average conveyancing firm completed 21% fewer transactions last year, although the market did rebound strongly at the end of the year, with transaction volumes up 27% in just one month.
The rush to complete transactions ahead of the end of the stamp duty holiday on 31 March has, as widely reported, seen the property market running hot, and it was reported yesterday that Chancellor Rishi Sunak is set to announce in next week’s Budget that he is bowing to widespread pressure to extend the holiday by three months.
According to the regular conveyancing market tracker from property data insight and technology provider Search Acumen, the average firm completed 190 transactions in 2020, compared to 240 in 2019.
Overall, at 680,232, there were 29% fewer completed property transactions registered in England and Wales in 2020, compared to 2019.
There was a 27% jump between November and December 2020, from 57,632 to 73,142.
This was the highest monthly figure since the Covid crisis began and not far below the level seen in February 2020. In April, when the market was shut down, there were a mere 440 transactions.
“The uptick in demand in the property market resulted in firms benefiting from stronger trading conditions,” said the tracker.
As a result, the number of active conveyancing firms continued to recover from the troughs of the first lockdown, increasing by 58% to 3,808 in the fourth quarter from a low of 2,411 in the second.
“However, despite the recovery from the early stages of the pandemic and the closure of the UK property market, the number of active conveyancing firms in Q4 2020 is still 3% lower year-on-year,” Search Acumen said.
“It also remains lower than at any point during the pre-pandemic period over the last decade from Q2 2011 to Q1 2020.”
The average number of monthly transactions for the typical firm rose to 50 in the fourth quarter; in the first quarter of 2020, the figure was 60. Excluding the pandemic period, the Q4 2020 figure was down 28% on the same quarter in 2019 and represented the lowest level of business seen since the third quarter of 2013.
The top five conveyancing firms by volume of business retained a 6% combined market share, despite their activity levels remaining 16% lower in Q4 2020 compared to Q4 2019.
Andy Sommerville, director at Search Acumen, said: “This latest data reveals how much more resilient the property market has been to pandemic-induced shocks compared to the wider economy.
“The surge in activity in the property market can be largely attributed to buyers rushing to capture the savings on offer through the higher stamp duty threshold.
“Demand has also been stimulated by a change in consumer appetite for properties outside of cities with access to green spaces, as more people than ever before are working from home.”
Mr Sommerville said the stamp duty deadline has put “enormous pressure on the conveyancing industry and the traditional processes underpinning much of it, not to mention putting lawyers’ stress levels and patience to the test”.
He said this “capacity crunch” was set to escalate over the next few months and “stretch the limits of existing working practices”, highlighting the need for firms to “fully embrace a digital approach to completing due diligence requirements quickly and accurately”.