Which means that, given the current number of aborted transactions we all have to deal with every single year, there is a great deal of work which is not being paid for, unless of course you charge an upfront fee, or the client does eventually go on to buy, but then you can still be waiting a very long time for proc fee payments.
Now, in a market where confidence is high and, therefore, so is interest in purchasing and ultimately, activity, it may not seem like such a huge negative for a purchase not to complete.
However, it is very doubtful that anyone would suggest we’re in such a marketplace right now, and with supply-side shortages, higher interest rate costs, and a fall in confidence about the future direction of the economy/jobs, etc, then the importance of every single purchase that you (and we) are working on becomes ever greater.
The current picture
To illustrate where we are currently, recent research from Barrows and Forrester suggests that, in the first five months of this year, 147,223 homes were sold across England and Wales, which would be a 54 per cent drop on the number of homes sold in the last five months of 2022.
Now, of course, there are always seasonal discrepancies to account for here. The vast majority of homes sold from August-December 2022 would have been working through the process long before the mini Budget and the fallout since then.
However, that’s a pretty sharp drop-off, and while the summer months tend to be pretty strong in terms of purchase transaction activity, I sense that few stakeholders feel 2023 is going to match what was achieved in 2022, and by quite some distance.
Giving buyers confidence
One of the key elements in such a market is of course providing your client with as much certainty as possible, and elements in the homebuying process which can increase that certainty have long been on our agenda as the Conveyancing Association (CA).
For example, we want to see upfront information regarding the property, title, etc becoming mandatory. We’d also like to see early use of ID verification and use of digital signatures. Essentially, anything that gives clarity to prospective purchasers upfront and which speeds up the process, rather than waiting some way past the point of offer made and only then beginning the work.
While we’d like to see the government deliver on that mandate, particularly for upfront information, we recognise that the industry can do a lot to help itself here. For a start, agents have to disclose material information which might impact a consumer’s use and enjoyment of a property at the start of marketing, while conveyancing firms who are specialists and immersed in the sector, can get ‘contract ready’ as soon as possible and move quickly.
Now, one of the arguments that is pushed back against the sector here, is that we can only work as quickly as the slowest conveyancer, particularly when it comes to chains; that some firms don’t want to, or simply won’t know, to ask for upfront information, because conveyancing is merely a sideline to them.
Reward efficiency
However, agents and advisers have a real opportunity here to promote those conveyancing firms not in this boat, those who can turn things round quickly, who recognise the speed and certainty upfront information delivers to all parties, and by doing so, should be able to benefit from the increased business and referrals.
After all, we all want to use firms who can get us to the desired destination in the quickest time, don’t we?
On top of this, 55 per cent of transactions are not in a chain so they are not reliant on the ‘slowest’, plus we saw the market move to those who could provide speedy searches a number of years back, and the same should be the case for conveyancers.
The simple facts of property life here are that, in a market where purchase activity has dipped, you want to be working on cases which have the very best chance of completing first time and quickly. That certainty will come – in a buyer’s market – from making a property look as good as it can, from showing that the seller is serious to the buyer(s), from being ‘contract ready’ in case rates go up after the buyer makes an offer and they can’t get a mortgage, and working with firms who understand this market and how upfront information can help.
In this current climate, on top of the work, time, energy, resource and cost you save by not having a case fall through and going through the whole process again, you also shave time off the actual transaction time. That could be the difference between break-even and profitability so I would urge all advisers (and agents) to think seriously about the conveyancers they recommend and the process they work to.
Your client will thank you, and it will make a big difference to you and your firm.
