A shortage of conveyancers means that a large number of house sales are being held up.
Paul Smith, CEO of haart, said that as a result the number of exchanges fell 14.7% in January compared with the month before, and down 7.5% compared with January 2015.
Smith estimates that based on his own firm’s figures, there were 50,152 exchanges in January, with average prices £225,914.
He said demand had risen by over one third year on year, while housing supply had risen 8%.
Smith said: “The property market in the new year has got off to a flying start with a surge in buyer registrations and new property instructions.
“The number of new homes coming on the market is up by a healthy 8% compared to a year ago but demand has surged by 35% over the same time period with buy-to-let investors responsible for a large proportion of this rise in anticipation of the stamp duty surcharge.
“This high level of activity has resulted in a substantial backlog of homes in the pre-completion stages, and we’re now seeing a shortage of conveyancers and lawyers to progress these sales, leading to delays and a subsequent decline in the number of completions in January.
“Across the UK, we’re now seeing more than 15 buyers chasing every property to come on to the market and house prices have subsequently risen by 10% annually.
“London is also seeing a high level of activity and finally the issues surround the supply of homes is starting to ease with a 20% increase in instructions registered compared to last year.
“In fact supply is now beginning to outpace demand which is up by 14% over the same time period. While this increase is very welcome, we are still seeing nearly 21 buyers for every instruction despite the slow-down at the top end of the market.
“First-time buyers have started the year enthusiastically with demand for starter homes up 26% annually.
“This is just the start of an upward trajectory for first-time buyers as the 3% Stamp Duty surcharge for buy-to-investors, due to be introduced in April, will mean less competition for homes.”
Comments (4)
This is the holy grail of stack it high, keep it cheap.
A cheap service that fails to deliver what the client needs. Conveyancers have slashed their own throats to the point where 6-8 week sale agreed to completion is now typically 12+ weeks.
I think both points are valid.
There are positive disrupter’s in the market such as Hoowla which bring affordable online technology to Estate Agents and Conveyancers that improves customer experiences, increase transparency and speeds up transactions. This can help the local high street solicitor compete with large online conveyancing companies.
No, the problem is that the internet disruptors have disrupted the field in an horrific way.
My experience of “online” conveyancers has been from 100% brilliant to crushingly awful.
The problem is that the average online conveyancer is not as good as an average local solicitor.
They charge less and regularly deliver less.
If you walk out of university with a shiny law degree would you want to go and work for what is essentially minimum wage? Never.
So the circle is complete.
I was an insurance broker in a previous life, anyone with ample knowledge of the market or solicitors in general, will understand that Law firms/practices pay a kings ransom for their Professional Indemnity insurance. A policy which is of course mandatory in order for them to practice.
Conveyancing solicitors paying one of the highest of premiums.
I would expect this has some bearing as to the lack of conveyancers, given that Sole Practitioners are also heavily rated by underwriters.
The collapse of Balva also left several firms in dire straits.