Although transactions in the UK property market have declined 3% in the last year, the longer-term dwindling number of conveyancers have had to handle more cases, with transactions rising 14% since Q3 2013.
According to data from Search Acumen, the total number of conveyancing firms active in the market dropped to 4,100 in Q3 2018 – a 1% fall from 4,144 in Q2, and by 2% drop from 4,191 in Q3 2017.
But while participation has fallen, conveyancing activity is up by 14% since Q3 2013.
Smaller conveyancers have been the greatest victim of market consolidation as over the last five years alone while bigger conveyancers are taking more business.
Big firms booming
Overall, 700 firms accounting for 15% of the market have disappeared since Q3 2011 as a result of mergers, acquisitions, periods of dormancy or exiting the market altogether.
The top 50 firms accounted for almost 20% of the market between July and September, with the biggest 500 firms each completing almost 500 cases per month on average.
And since 2011 the top 1,000 firms have taken their market share from 70.5% to 75% – giving them a bigger share of what has become a bigger market.
Meanwhile, the smallest 3,100 firms were handling just 25.5% of transactions in Q3, compared to 2011 when the smallest 3,402 firms handled 29% of the market.
Local conveyancers struggling
Search Acumen managing director Andrew Lloyd said technology had been a big driver in allowing smarter firms to steal a march on their rivals.
However, this meant the smaller, local conveyancers have struggled seeing margins squeezed, local business networks shrink and opportunities to find new business diminished.
“In contrast, larger firms have been able to take advantage of market consolidation as more cases come their way,” he said.
“They have geared up their businesses and continued to grow over the last five years even as the market’s growth has slowed from the heady days of 2014-2016.
“Others have seized the opportunity to enter the fray for the first time with new propositions or aligned themselves with former rivals through mergers to stem the tide.”
Lloyd noted that it was apparent conveyancing consolidation looked set to continue and firms needed a clear plan to prosper in the face of a potential weakening market.
“They cannot simply rely on transaction volumes increasing year-on-year, so will have to work smarter and deliver better, faster and more transparent services to give customers an incentive to pick them out of the crowd,” he added.