Conveyancing figures allay fears of a Brexit slump in the housing market
You may think with all the talk of Brexit that buying and selling on the property market had stalled as buyers worry that the house they buy may suddenly drop in value after Brexit while other buyers may be waiting for an anticipated drop in house prices post-Brexit. Figures recently released by Search Acumen tells a different story.
Using their market tracker to analyse Land Registry data, the property data specialists have shown that property transactions among conveyancing firms have been at its highest level since the UK voted to leave Europe all the way back in June 2016.
Between October and December 2018, there were 267,438 cases which were handled by conveyancers, an increase of around 7% as compared to the previous three months which dealt with 248,023 cases. This was despite this period coming at a time where Brexit was supposedly edging closer when the original deadline was March 29th 2019.
In fact, the closer we seemingly got to Brexit, the more transactions were taking place with the top 200 conveyancing firms seeing, on average, an 11% rise between the third and fourth quarter of 2018.
The extended deadline of Brexit towards the end of October might not hold as much dread as expected for conveyancers after the release of this data. The last three months of 2018 were the strongest when there was only one more quarter before Brexit when the market would have supposedly been at its most perilous so these additional months might not be looked at as an additional challenge to conveyancing transactions after all.
Challenger Firms Thrive in a Brexit Property Market
The clearest results of growth come from so-called ‘challenger’ firms found in the lower top 100 of conveyancers who saw a rise of 27% between October and December this year in comparison to the previous year. Considering these firms tend to report 100-200 transactions a month, the percentage increase is a significant boost. This also comes at a time where completed mortgages for home purchases reaches an all-time high for first-time buyers too.
Before the prospect of Brexit existed, there were 83 firms who handled 100 or more transactions a month but now by the end of 2018, there were 141 firms confirmed showing an increase of 70%. It is good news for conveyancing firms which in turn means it is good news for the housing market. Are first-time buyers are taking advantage of Brexit?
The only blemish to come out of the report was that there had been a 10% decrease in the number of small firms, firms dealing with 25 transactions or less a month, falling from 3,623 in 2013 to 3,259 at the end of 2018.
The data has shown that fears of a dramatic collapse due to Brexit uncertainty have been unfounded, at least in the build-up to Brexit itself. Andrew Lloyd, Managing Director of Search Acumen, says the data backs up that point:
“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.”
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