With the stamp duty deadline fast approaching, pressure on the conveyancing sector continues to grow as transactions soar.
New data from Search Acumen, the property data insight and technology provider, shows that the number of property transactions registered in England and Wales increased 26% in the first three months of the year, rising to 241,916 in Q1 2021, up 2% from 192,063 in Q4 2020.
This is the first time quarterly transactions have topped to pre-pandemic levels since the onset of Covid.
Q1 2021 transaction volumes were up 193% compared with those recorded in Q2 2020 after the shutting down of the property market caused transactions to fall to just 82,385.
The jump in property transactions has been primarily driven by the stamp duty holiday, introduced in July 2020.
Search Acumen’s analysis shows January 2021 represented the busiest month of the quarter, with 86,130 transactions occurring, the highest monthly total since November 2019. There was a slight dip in February 2021 to 76,239 transactions, likely resulting from uncertainty over whether the SDLT holiday would be extended beyond March, as well as the impact of the return of lockdown conditions over Christmas and January.
Number of quarterly transactions since Q1 2019
The tracker shows high activity levels in the market have contributed to a sustained recovery in the number of active conveyancing firms. Active firms climbed 4% over the last quarter to 3,962 in Q1 2021, up from 3,808 in the previous quarter.
Stronger trading conditions have helped to push the number of active conveyancing firms above pre-pandemic levels for the first time, with levels now exceeding the 3,928 firms in operation in Q1 2020 and the 3,920 who were active in Q4 2019. Comparisons to Q2 2020 illustrate the pace of the market’s recovery, where there were just 2,411 firms active. Q1 2021 figures represent a 64% increase from the heights of the pandemic.
The number of transactions completed by the average firm rose 21% over the last quarter to 61 per month, underlining the scale of orders conveyancing firms are having to process amid strong demand in the property market. This is a considerable jump from when the pandemic took hold in Q2 2020, which saw average caseloads drop to just 34%. Since then, average transactions have increased, with Q1 2021 representing the pinnacle of activity being handled by conveyancers since the pandemic began.
This data indicates that the growth of the property market shows no signs of slowing down, according to Andy Sommerville, director at Search Acumen.
He points out that government stimulus measures, including cheap mortgages and stronger demand for larger properties that provide more green space and opportunities to work from home more comfortably, are the main factors behind the bounce-back in transactions.
He commented: “Conveyancers have been running hot to help get clients’ transactions over the line since the stamp duty holiday was first announced. Our analysis suggests that the cost of protecting the property market has had intense pressures on real estate lawyers. Higher average transaction volumes illustrate the growing workload conveyancers are having to shoulder, which has put a huge strain on their wellbeing and productivity.
“The extension of the stamp duty holiday is likely to have a more muted impact on demand in the property market in the medium term. Since a large proportion of activity has been driven by buyers who have relatively higher amounts of housing equity and are now likely to have completed transactions, the pool of prospective buyers in the market has shrunk, which will put downward pressure on demand.”
“Despite this, lawyers have a huge task ahead of them to clear the backlog of transactions that have piled up and help homebuyers achieve their dreams before the window shuts. While many firms have embraced digital ways of working to manage during Covid-19 restrictions, we urge the sector to prioritise a digital-first approach as we look to the future.”
Number of active conveyancing firms since Q1 2019