Blog: Are conveyancers to blame for transaction delays?
At around 96,000, the number of residential property transactions in the UK in June this year was only around half the level it was 12 months earlier. There are a number of obvious reasons behind this dramatic decline – and some have had a much greater market impact than others. Some property industry professionals are blaming conveyancing practices for at least some delayed and aborted transactions. So, is that criticism justified?
It should be acknowledged straight away that changes in Stamp Duty Land Tax probably had the biggest impact on these fluctuations in transaction numbers. There was a huge spike in sales in June 2021 as buyers pressed for completion before the threshold for stamp duty was adjusted from £500,000 down to £250,000 at the end of that month. With buyers pushing for their transactions to be completed before the deadline, a sharp decline in purchases in the following months was always on the cards.
And since then, a series of other developments has borne down on transactions numbers, serving to exaggerate the spike in sales last June. The outbreak of war in Ukraine, a worsening global economic outlook, inflation, the cost-of-living crisis and rising interest rates – all have had a dampening effect on buyer confidence, affordability and housing market activity.
Within this mix, however, a number of property professionals have also pointed to the conveyancing sector as a source of delays and disruptions to property transactions. One estate agent recently reported “continuing industry-wide capacity issues” in the conveyancing sector meant that it was taking longer to get housing transactions over the line.
This causes frustration. We struggle to anticipate drawdown dates, and those planned are often missed. It makes life difficult for our staff and is very frustrating for clients, too. Lead times also look longer when a client uses a separate firm to act for them, as it adds another link in the chain.
Innovation in the sector
In recent years, professionals working on different stages of the transaction process have adopted technological innovation to improve efficiency and speed up processes. Lenders, brokers, estate agents and surveyors have sought to provide a quicker and more efficient service for customers. There has, however, been some criticism that conveyancers have been slow to change long-established, paper-based working practices.
Some conveyancers still send PDF documents to their customers, which are then filled in by hand. Conveyancers have been accused of being bureaucratic, often relying on ink signatures and a postal service to move paperwork around. Many operate from small, long-established high street firms, and have been slow to innovate and adopt technology.
Of course, those accusations are unfair to conveyancers that have managed to speed up their processes and work more efficiently for customers. But firms that have been slower to adapt have been exposed by the disruption to the property market, partly caused by the Covid pandemic.
The impact of stamp duty
The stamp duty measures introduced by the government caused a surge in activity that put pressure on firms already struggling with staff shortages and other effects of the pandemic.
Dealing with a surge in business while staff were working from home was a challenge for many firms. There have been reports that conveyancers have struggled to cope with the pressures caused by the additional workload and that this has triggered an exodus from the industry, further adding to the shortage of capacity in the sector.
Meanwhile, the changing interest rate environment since last summer has inevitably led to some mortgage re-pricing. That has further increased the pressure for transactions to be completed quickly and efficiently. In some instances, mortgage offers have expired before a transaction can be completed, leading to further criticism of delays in the process.
A role for buyers and sellers
Ultimately, it is buyers and sellers – as well as property industry professionals – that have felt the consequences, and there has been an increase in the number of websites offering advice to consumers on steps they can tale to speed up the conveyancing process.
Sellers are now being urged to start the process of collating information and documents to avoid delays. They can help themselves by filling in property information forms as soon as possible, and by applying for a leasehold management information pack if they are selling a flat.
Buyers can also help speed things up by seeking an offer in principle from a lender, choosing a proactive solicitor and checking at the outset that the chosen solicitor can act for the lender.
A slowing property market creates its own delays in the transaction process. Over the years, however, many property industry professionals have innovated and applied technology to speed up processes. They would now like to see a renewed sense of urgency to address continuing delays – in the conveyancing sector and wherever else they occur.
Paul Clampin is chief lending officer at Landbay
The post Blog: Are conveyancers to blame for transaction delays? appeared first on Mortgage Strategy.