I attended the 2019 LegalEx conference at the London ExCeL centre and spent time meeting and greeting delegates from across the industry talking about current topics and agendas. I came across a number of issues and subjects that are prominent in the Housing market today, here is a summary of the interesting things I came across...
1: Technology is at the forefront of change for Solicitors, Lawyers and Conveyancers.
In 2019, there is more tech available than ever with firms becoming completely reliant on technology to power their practice. With the HMRC having rolled out Making Tax Digital as of April 1st 2019 to improve data capture and handling, there is no better time to embrace and invest in technology. Cloud-computing, AI predictive coding and practice management systems are fast becoming essential and fundamental tools for the forward thinking lawyer. The legal industry seems to be more receptive than ever, ignoring what tech is available will certainly reduce a firm's ability to compete with the ever changing marketplace. Instead, embracing technological change will ensure that practices are not being left behind. (For more information on Making Tax Digital or the InTouch case management system, please visit https://www.intouchapp.co.uk/news/making-tax-digital or https://www.intouchapp.co.uk/)
2: Pricing Transparency.
Although most firms I spoke to agree a level playing field will benefit the industry, it is clear that not all firms have done enough to comply with the CLC/SRA transparency guidelines. Some have not actioned anything at all which leaves an uneven marketplace for consumers. One conference attendee mentioned two of his direct competitors are still not compliant. In the Residential Conveyancing Thematic Review conducted by the SRA in April, they found that 34% of firms are still providing inaccurate quotes at the initial quoting stage. Not only that, 37% of firms are still not fully explaining what 3rd party disbursements are likely to be incurred.
More and more inspections are being carried out by the governing bodies and firms are being advised to ensure that all consumers have a full understanding of expected costs before instructing. The sooner everyone is on the same page, the quicker the industry will feel the benefits. If you are looking for the most advanced way to comply then visit https://www.intouchapp.co.uk/quotation-calculator
3: Reservation Agreements.
After speaking to multiple owners/directors, all seemed to think Reservation Agreements are a step forward. The government plans to reduce fall out rates are well received on the whole, however there is still scepticism as to whether this initiative can be rolled out successfully. One conference delegate believes that it is simply too hard to effectively bring in new legislation that will make a difference and that there will always be high fall through rates. Talking during the ‘The future for the home buying process’ seminar at the Westminster Legal Policy Forum in November 2018, Matt Prior of MHCLG (Ministry of Housing, Communities and Local Government) advised that currently between 25% and 33% of housing transactions collapse costing £270m per year. According to further research undertaken by MHCLG, around 50% of buyers and 70% of sellers would like to use the agreements if they were available.
The aim is to significantly reduce the fall out rate which in turn will reduce the negative knock on effect on chains whilst decreasing the national conveyancing turnaround average of 10-12 weeks. Matt prior advised during the seminar that “We’re not making them mandatory at the moment, we want to try this as an idea”. There is however a worry that if not mandatory, Estate Agents are unlikely to follow as sale subject to contract numbers may decrease. Whatever the challenges, there is optimism that making Reservation Agreements standard practice during the house buying process will tackle these long-standing issues.
The one word we heard the most when speaking to firms was ‘BREXIT’! As per the rest of the nation, there is a large degree of uncertainty as to how this will affect the country and different industries. The property market is no different, with most firms erring on the side of caution to prevent negative outcomes. This is therefore having an effect on decision making processes and investment ideas. Some firms do not want to invest in new processes or technological infrastructure if the market suddenly slows down.
However there may be more reason to be positive then first thought. I spoke to one Top 20 UK law firm who strongly believes there will not be a huge downturn in transactions as generally perceived and that there is simply negative hysteria surrounding Brexit. Another small firm I spoke to actually said they have experienced a significant rise in purchases in the last 2-3 months. Property website giant Rightmove advised that there has been an average jump of 1.1% on property asking prices equalling £3,447 in the last month on their latest April 2019 House Price Index (https://www.rightmove.co.uk/news/house-price-index/).
Whatever side of the fence you sit on only one thing is for certain, no one can definitively predict what impact Brexit will have on the industry. Best course of action is to remain positive, continue to develop business practices and processes and plan as best as possible for any potential drop in business.
There are a number of issues that firms are consistently facing in today’s property sector, fortunately most have a solution.
Embracing technological change can only be a good thing for your practice. If you are looking for an advanced practice management system to streamline your business and automate as many tasks as possible, take a look at how the InTouch platform can enable that growth. https://www.intouchapp.co.uk If you happen to be concerned about a potential reduction in enquiries due to Brexit, why not give clients the ability to instantly quote out of hours and ensure you maximise conversion on potential leads. Or if you have simply fallen behind on getting up to speed for the Pricing Transparency guidelines, see how InTouch can comply and generate more leads by visiting https://www.intouchapp.co.uk/quotation-calculator