Residential property market

Current Supply & Demand
There is a shortage of quality conveyancing operations to handle the volume of remortgage and sales and purchase work. Out of 1 200 000 properties which changed hands last year about 500 000 mortgages were granted. Yet despite the lack of supply to meet demand there is still pressure on fees and this results in tight profit margins.

Some 50 to 75 firms in England and Wales are doing volume conveyancing work with varying degrees of success and some have had to re-engineer their operations at considerable cost. Under-investment and poor management have been common problems and it is these failings which have hampered the effective development of firms. Technology is still not being implemented effectively in many firms and training and marketing are not well developed. It seems that high volume conveyancing work is fraught with many technological and administrative problems.

Trends in the mortgage and lending industry
There have been many and radical changes here and this means new solutions have had to be found driven by technology, increased regulation, branding, commoditisation and changing consumer demand. Financial pressures have resulted in consolidation and rationalisation among the traditional lenders. Joint ventures, associations, partnerships and shared resources are also being entered into in order to develop competitive advantages. In fact traditional models for distribution, processing and funding have been supplemented by new techniques and initiatives to create a complex labyrinth of possible routes from application to redemption, such as interconnecting networks and web-based portals.

The author foresees the effective introduction of e-conveyancing being completed only in about 10 years time and by then much of the legal work will be an administrative process. This will mean closer integration between conveyancers and lenders and the creation of common trading platforms, tracking processes and risk management procedures.

The future of conveyancing services?
Beyond 2006 the point of sale and/or local distribution might not be the traditional solicitor but an estate agent. Most conveyancers agree that the work is 80% project management and 20% legal, with the legal component being reduced as technology becomes more effective. Effective and appropriate communication is central for the ability of lawyers to make their services more attractive. This will involve technology, consistency of procedures, transparency, certainty and the availability of information.

Link to InPractice

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