Joe Bloggs law firms handling more conveyancing transactions than in 2007

The average law firm is handling more conveyancing transactions than in 2007 due to market mergers and exits, a report from a search provider has found.

Conveyancing activity in 2014 fell 23 per cent short of the heights of 2007 but, with fewer competitors in the market, the average number of transactions per firm reached a ten-year high according to the first edition of Search Acumen's Conveyancing Market Tracker.

The tracker draws on ten years of Land Registry data since 2005 to assess market conditions and also gauges the outlook for growth among conveyancing firms in the early part of 2015.

In 2014, the total number of firms active in the market was 5,871, down a quarter (24 per cent) from the 7,733 seen in 2007. This loss amounts to 1,862 firms exiting the market or merging with competitors.

Last year also saw business numbers drop by 204, despite total activity rising by 28 per cent from 2013, which amounted to 1,025,634 transactions.

Search Acumen's analysis suggests that survivors of the recession, as well as new entrants to the market, are reaping the rewards of recent growth.

The average firm carried out one-third (33 per cent) more transactions last year than in 2013, the highest figure recorded in the last ten years.

Surviving conveyancers saw average volumes reach a record high in 2014

 

 

Results show that competition among the biggest firms has intensified and driven up the overall average of transactions.

Seven conveyancing firms completed more than 500 transactions per month in 2014. Only four firms managed the same in 2007 and just one in 2005. A record 7 per cent of all transactions were carried out by firms of this size in 2014, compared with 2 per cent before the financial crisis.

Average volumes of work among the 200 biggest firms were up by 5 per cent last year compared with 2007. Individually, they carried out more than ten times the average of 175 transactions completed by the typical conveyancing firm.

Collectively, the 200 largest firms achieved a 36 per cent market share in 2014, up 10 per cent from 2007.

Meanwhile, the five biggest firms have enjoyed the largest percentage increase in transaction volumes since 2007. Their collective market share has also doubled during this period to 6 per cent.

However, their 38 per cent annual growth rate from 2013 to 2014 was bettered by the next five biggest firms, whose activity levels increased by 49 per cent.

Commenting on the report's findings, Mark Riddick, chairman of Search Acumen, said: 'The fall and rise of conveyancing in recent years has seen many firms fall by the wayside. Low volumes of transactions in the recession were fuelled by little more than debt, divorce and death. It meant conveyancing in the lean years quickly became a story of "survival of the fittest".

'Those businesses that rode out the tough times are now reaping even greater rewards than they did at the last peak of the market. Especially at the top end of the food chain, more people are coming through the door of the recession survivors than was the case even in the heady days of 2007.'

The top five conveyancing firms in 2005 included Shoosmiths, Countrywide Property Lawyers, My Home Move Limitd, Atteys, and Browns Solicitors. In 2007, the big five list had changed with Trowers & Hamlins on top followed by My Home Move Limited, Shoosmiths, Browns Solicitors, and Rosser Thomas Lewis.

Last year, the conveyancing service My Home Move Limited led the way followed by Stevensons, Countrywide Property Lawyers, O'Neill Patient, and Olswang.

Average number of conveyancing transactions per year

 

Firms ranked 51 to 100 were the next best performers in 2014 by increasing their transaction volumes by 37 per cent compared with the previous year.

'The fact that the 51st to 100th ranking firms grew faster last year than some of their bigger rivals proves growth is not limited to those already seated at the top table,' added Riddick. 'But competition will hot up even more if transactions fall slightly as expected this year. Conveyancers must do all they can to protect their position and close the gap to those above them so they are not the next ones left behind.'

In 2014, there were 5,013 firms that averaged fewer than 25 transactions a month. This was 24 per cent down from the 6,590 businesses which recorded the same level of activity in 2007.

Some smaller firms have since merged or expanded to take on higher volumes of customers, others have disappeared as businesses fought for survival.

Almost three-quarters of all transactions were carried out by the 1,000 biggest firms in 2014.

The five biggest firms grew their collective market share from 5 per cent to 6 per cent last year, but this was still less than the 7 per cent achieved in 2012.

How the top conveyancing firms seized market share

Barriers to growth

Asked what the three challenges were to continue growth in 2015, the majority of firms identified a need to improve systems and processes, competition from volume conveyancers and a need to increase staff recruitment and training.

'Focusing attention on internal systems and processes will help businesses take control of their own destinies so their survival and growth are not left to chance,' said Riddick. 'Competition from firms set up to routinely handle large volumes of transactions is a harsh fact of life as a conveyancer in 2015.

'Recruitment and training is one part of the equation, but once you have the right people in place, it is vital to equip them with the tools to achieve peak performance. By fine-tuning their setup, conveyancers can give themselves a fighting chance of taking a share of the spoils.'

John van der Luit-Drummond is legal reporter for Solicitors Journal