LSL Property Services has criticised solicitors for taking too long to sign off property transactions.
LSL’s estate agency division, which includes brands such as Marsh & Parsons and Reeds Rains, saw revenue drop 9% in the first four months of the year compared with the corresponding period last year.
Those heading up the estate agency division said that the “continuing industry-wide capacity issues in conveyancing” meant that it was taking longer for its agents to get deals over the line in its latest trading update.
But LSL is hoping the situation will improve in the near future given that the residential sales exchange pipeline now stands at nearly record levels, having increased by over £4m since the beginning of the year.
Overall, group revenue over the first four months of 2022 was £104.5m, which is in line with that achieved in buoyant markets in the same period in 2021. The board at LSL says it is particularly pleased with the “strong performance” of its surveying division where revenue was up 11% year-on-year.
The company also reports 5% revenue growth in its financial services network business. Over the first four months of the year, purchase and re-mortgage lending totalled £10bn, an increase of 9% over 2021.
The trading update stated: “Geopolitical uncertainties remain which have added to inflationary cost pressures, particularly in relation to energy and employee costs. We continue to focus on proactive management of our cost base, to limit the impact of these pressures, and consequently expect these pressures to have only a modest impact on profitability.
“Following investment in 2021, we have continued to invest in capability and technology, in particular, across the Financial Services Division. We plan to continue to do so during the second half of the year.
“Our net cash balance on 30 April 2022 was £30.4m, compared to Net Debt of £7.8m at the same date last year.
“We were pleased to recently announce the third acquisition by Pivotal Growth. Whilst there is a good pipeline of deals, and we remain confident of the medium-term prospects for value creation, completion of acquisitions has been slower than expected, and as a result Pivotal Growth has remained in an investment phase for longer than previously anticipated.
“At the start of the year, we expected to deliver full year profits at broadly the same level as our record results in 2021, in markets with reduced levels of activity. Recent market estimates indicate that residential pipeline conversion rates should improve resulting in full year 2022 house purchases not being materially behind previous expectations. Assuming activity is in line with these estimates, overall profit is expected to be slightly behind the record profits posted in 2021, principally reflecting slower than anticipated deal flow in Pivotal Growth, and the limited impact of cost inflation noted above.
“We have yet to see clear evidence of a sustained improvement in residential pipeline conversion and should the current slow conversion rates across the market persist or fall throughs increase, then more significant pressure would be placed on profits in our Estate Agency Division and to a lesser extent in our Financial Services businesses.
“Whilst uncertainty over the pace of housing transactions may impact the second half of the year, we are encouraged by continued progress we are making in the execution of our strategy. This year’s performance demonstrates the benefits of both our growth strategy in Financial Services and the significant progress made in our Surveying Division, and we expect that the impact of housing market cycles will continue to have a reducing impact on the Group’s results.
“As previously reported, the split of H1:H2 profit in 2022 is expected to revert to a more typical profile with a skew to H2, after record housing transactions in H1 2021.
“The Board places a high priority on LSL’s Living Responsibly strategy to make sure that LSL is a responsible business and one that has a positive impact on the communities in which we operate. We have established colleague forums which variously focus on the environment, inclusion and diversity, and communities and these have been instrumental in taking forward our activities in these areas. Further information can be found in our Living Responsibly Report 2022 which we published on 29 April 2022.”
Comments (12)
I have a friend (let’s call him John) going through the home buying and selling process right now (well trying to). To say he is struggling is an understatement.
The problem seems to stem from the foreign, non-English speaking buyers at the bottom of the chain. Originally buying with cash, then decided to get a mortgage, then decided to buy in a company name, causing delay after delay. Fair enough, not a lot you can do with a buyer like that. However, the frustration John is suffering is compounded by the fact that he cannot get any meaningful updates via his conveyancer or the agents. His conveyancer says he is ready (and can’t get any info from the conveyancers directly below), so, not his fault. His agent cannot get John’s buyer’s agent (a well-known national name) to return any calls or do any chasing, so not their fault. John’s buyers are legally represented by conveyancers recommended (!) by his agents. Large referral fee involved no doubt.
All John wants to know (to pass on to his seller) is how long will the switch to buying in the company name take? His seller says he will put the property John wants to buy back on the market this week. Looks like another chain will collapse, all through a lack of good communication.
John vows never to move home again.
Who is to blame? What can or should be done? Answers on a postcard please.
Was it John’s agent or their buyer’s agent who recommended the lawyer?
If it was John’s agent, then John needs to raise a complaint with their agent, who in turn needs to have a word with their panel intermediary or manager/BDM at the firm they recommended. Get the buyer to chase their lawyer and agent too.
If it was the buyer’s agent, John’s agent needs to have that a word with their buyer instead, explaining their purchase is in jeopardy because everyone at the top of the chain is in the dark as to what is happening. If the buyer does not already have an update, then they need to make a complaint to their agent (assuming there is an actual estate agent, and not a passive intermediary such as PB) and their lawyer.
If I were the agent, I would ask the buyer to send me a copy of the Memorandum of Sale for their related sale so I could contact the bottom of the chain directly.
Thanks. Chain sheets would help.
This is in stark contrast to years of posts about agents being the root cause of the sales process and not conveyancers. Seem some have short memories, only recently the conveyancing process was highlighted as being archaic in a time of technology which that industry has failed to evolve or unable to.
We conveyancers in the profession (it is not an industry) know that it is a rudderless ship lacking leadership and regulation where standards have never been lower (at least not until next week).
Can’t wait to hear next week how they propose to change anyhting with so many parties with fingers in the pie, many not conveyancers or estate agency!
We conveyancers in the profession (it is not an industry) know that it is a rudderless ship lacking leadership and regulation where standards have never been lower (at least not until next week).
But it is our profession, and for that tiny minority of us who still care passionately about our clients and love the job despite all the hurdles placed in our way we will always defend it. We know what the problems are, it is simply that they are now so deep rooted, and protected by such self interest, that they will never be resolved.
But these ill-informed press releases that are put out by people with no obvious knowledge of the profession looking for an easy target to cover their own shortcomings, will eventually probably prove to be self-prophesizing. Good experienced conveyancers are leaving the profession in droves, mainly because there is now so little professionalism in conveyancing and associated companies we have to work with. I wonder whether the writer of this press release has ever tried ringing a Lender during a transaction? I am guessing not, so to criticise conveyancers without clearly being aware of the daily trials and tribulations in our profession is laughable. Though at the same time nonsense like this serves only to hack off people like myself who think “what is the point” when we have to read such rubbish.
If people outside conveyancing want to see a continuation of good quality conveyancers leaving the profession they can keep on producing such rubbish. If not can they kindly look at themselves in the mirror and put their own houses in order before criticising areas where their knowledge is clearly limited and ends up embarrassing them?
Or is it just that these people will not stop throwing stones until they get High Street one-stop conveyancing shops in every Agent? If that is what you want that will happen, and be afraid, be very afraid in what you wish for?
Spot on as always Alan. Can’t add a thing.
The comparison is with the same period last year, which was hardly a hotbed of Conveyancing excellence. Whilst they may not be much better now, they can’t be 9% worse.
Maybe they should look at the Firms they refer work to.
It’s almost pointless having this debate on here because nobody that could conceivably change anything is paying attention – not even that many fellow agents judging by the ever diminishing number of comments on various posts – but for the sake of venting one’s spleen over my morning tea – nothing is ever going to improve unless and until those that provide conveyancing services start charging proper fees in order that they can pay adequately capable people to do a proper job. Doing ‘stuff’ on the cheap – whatever it is – simply doesn’t work for anyone, least of all the customer! Here we are in the age of technology and house conveyancing is taking longer than ever! Good agents (and there are still a few – albeit a decreasing number) are working hard to put deals together only to place them in the lap of the Gods when the conveyancers step in, left hoping that one day we might get paid a fee! That’s hardly a reliable business strategy! I’m old enough to remember the days when a sales pipeline would convert up to four times a year, now it’s barely three. I’m not here to throw meaningless insults but facts are facts; most conveyancers don’t even open files until the sale is agreed, have no sense of urgency when it’s required and neither do they communicate well and unless more and more providers grow a pair and start charging sensible fees instead of cutting corners to save costs – or even worse upsell their ridiculously low headline fees with unnecessary indemnifies – it’s not going to change. Maybe there is hope that a tougher market will force a solution. PS we talk about it all the time but many fellow agents need to learn the same lesson. Whilst a client will never be the slightest bit interested in whether or not a service provider makes a profit, the fact remains that unless they do then the quality of service will never be what it could or should be and clients will continue to suffer as a result.
Hear, hear!
And ask yourselves why…. I can assure you it is not simply to upset the estate agents of the world. Conveyancing is a complex process which gets ever more complex and the level of expertise is diminishing. As new faces join the profession they soon decide that no amount of salary will cover the abuse they suffer, so they leave. Understand and respect the job each of us has to do and then use that as a starting point to work together in managing clients expectations. If we continue with this THEM and US attitude, and everyone puts on their body armour to go into the home buying process, then we will continue to war – the focus has become on the battle rather than the result. Better to work together to project manage deals and manage clients expectations, by singing off the same hymn sheet. The sooner agents and conveyancers can actively synchronise what they do, the sooner we create harmony. We have to work together and come up with solutions together. This is all about mindset shift and ditching old fashioned bias of professions. It’s about drawing a line on what is and then thinking, what can it be and how can I influence that. It’s about being kind, and collaborative and putting to one side old attitudes, presumptions and assumptions. This is not a criticism of either but moaning and blaming is not solving. A positive debate and real action is required – rather than playground ‘He said’ ‘She said’ and pointing fingers which doesn’t seem to be helping the home buying process. Current attitudes are simply widening the bridge between us – and the wider the bridge, the longer it will take to cross it.
There is little to synchronise between agents and lawyers. If there is more I can do to speed up the conveyancing process, I will do it.
The abuse conveyancers receive is a result of frustration with how long the process takes. I understand that some files can be complex, but it should not take 3-5 days for a lawyer to look at a one-sentence response to a final enquiry. It should not take a paralegal over two weeks to get approval from a more senior conveyancer on the wording of a stat-dec. It should not take a seller chasing an update on the management pack before it is realised the lawyer has not applied for it in the three weeks since they received payment from the client.
If the continued delays are a result of professional brain-drain, or lawyers having far too many files to manage, or because remuneration is not good enough, then what is the solution? Identify and fix the issues! It is not enough to say agents need to help manage their clients’ expectations, when managing expectations looks like “Sorry, Mr Bloggs. The reason your lawyer is not replying to emails and voice messages is because they have far too many files to deal with. I know you need to complete urgently, but it’s probably going to take them another week to send you a completion statement.”
Too many conveyancers retiring, merging or simply walking away, and not enough young blood coming in at the other end. I know plenty of conveyancers who still enjoy their work (on the whole), but I know more who no longer do. Conveyancing in the 21st century is far more challenging than it was in the 20th century, making it as a career, attractive to a new wave of youngsters, is going to be very challenging unless the job becomes more manageable and provides better rewards than it does currently.