A Year to Remember or Forget? Lloyd Davies Reflects on 2023
Lloyd Davies, founder and Managing Director of Convey Law and Chairman of the Conveyancing Foundation, reflects on a difficult, but at times inspiring year for the conveyancing industry and profession, with the most difficult of economic conditions and challenges, but also with perhaps the roots of change and better times ahead in 2024.
As Conveyancers, we operate in such a volatile market, where government economic policy can and has repeatedly made our professional lives a misery. The seasonality of conveyancing is difficult enough to deal with – feast or famine at different times of the year – let alone with the government and economic policymakers intermittently blowing up the property market.
Having just endured the crazy years of Covid and SDLT holiday deadlines, things were going well until Liz Truss took power in October 2022! Can you imagine a world where Prime Minister Truss had not gone completely bonkers and turned our world upside down in a little over two weeks!? Back then interest rates were next to nothing and the property industry – and the UK economy – were at a point of making good progress – despite the inflationary position – which was much aligned to the rest of Europe and the US post-Covid.
We started 2023 hoping that the debacle of the very short but ultimately devastating Truss government was behind us and that the property industry would begin to recover. Unfortunately, Bank of England Governor Bailey and the Monetary Committee had other ideas and used the opportunity to put the economy into recession and the housing industry into reverse with a series of 15 devastating interest rate rises.
On the pretext that high-interest rates would slow householder spending and reduce inflation, interest rate rises led to a reduction in property transaction completions of close to 30% on previous years!! The heady years of 2020 to 2022 were well and truly behind us, with property buyers hesitant and with the highest mortgage interest rates in 15 years curtailing the market.
All in a good cause, according to Mr Sunak, with the dreaded impact of inflation avoided, as we begin to see inflationary figures decrease again in recent months. Raising interest rates is inflationary, as it increases unavoidable household expenditure. It does also curtail economic growth, with business lending and investment more difficult and so unemployment rises and businesses contract – and so inflation is avoided – recession is not, unfortunately!! The upside of course is that the banks – and the Conveyancers – make a lot of money again out of client account interest!!
Conveyancing businesses have all cut their cloths, trimmed staff and expenditures to allow for the downturn. Expenditure has increased across the board in terms of running our businesses with even the cost of Regulation increasing at the most inappropriate of times.
We continue to see more and more Conveyancers leaving the industry, as well as the reported closure of Conveyancing practices and departments. With the work required of Conveyancers to complete property transactions increasing all of the time and the inherent stresses of the conveyancing process, we will all be concerned as to the wellbeing of our Conveyancing professionals and their support teams.
The Conveyancing Foundation Wellbeing at Work Survey 2023 revealed that over 70% of Conveyancers felt stressed some of the time, with over 20% saying that they felt stressed and overwhelmed most of the time! We have to look carefully at the capacities and the workloads of our conveyancers to ensure that they are manageable and not overwhelming. It was heartening to read that Conveyancers have increased their fees over the course of the last three years and we are all perhaps learning to charge appropriately and proportionately, with fixed fee conveyancing perhaps a thing of the past, so that Conveyancer workloads can reduce accordingly.
The Conveyancing Foundation Wellbeing at Work Survey 2024 will launch again on the 8th January and I hope that we will see that Conveyancers have adapted and built on their good work in offering hybrid and flexible working practices and in managing their work and personnel effectively over the course of the last twelve months.
It was really heartening to see the Law Society publish the new Electronic Code for Exchange of Contracts protocol last month. With the Law Society Code for Exchange by Telephone a little outdated, having last been updated in 1989 I believe, which as a few years before I started practicing. The new Code is quite fantastic and just what we needed – even if many of us have been adopting email strategies for the release and exchange of contracts for several years. Very well done and a genuine thank you to the Law Society – I look forward to seeing the new Code adopted universally in 2024!
Come on Mike Harlow and the Land Registry! After some great work in ascertaining the principles of digital identity and HMLR Safe Harbour, we appear to have stalled on how we use this functionality to sign deeds electronically. Surely this is just a policy document, linked to undertakings for Conveyancer compliance and showing us what the electronic attestation and signature should look like!! We appear so close – fingers crossed for 2024!!
I think that the industry agreed on what digital conveyancing best practice looked like about five years ago – we now need to make it happen. Good but limited progress as above and we do have some legislation that could assist, with Agents required to provide more upfront information at the point of marketing, which could and should involve the lawyers at this point. I have been advocating for some time that greater emphasis should be placed on the Seller’s Conveyancer to compile a full and comprehensive Contract Pack, as opposed to relying on the Purchaser’s Conveyancer to raise inquiries. Perhaps the Regulators could make it mandatory that all relevant documentation is presented or requested at the contract production stage – this is perhaps all the mandation that is required? The upfront provision of documents is key to reducing transaction timelines and the stresses of pre-exchange queries and issues. Perhaps we don’t need government legislation – come on the Regulators!!
Despite our troubles and the challenges of conveyancing, our industry is full to the brim of lovely, kind, and fun-loving professionals, who love to come together and work together for the collective cause. National Conveyancing Week was a huge success this year and very well done to new Conveyancing Foundation Ambassadors David Opie and Bertie and Lynne Hailstone and their respective teams for their excellent work in bringing the conveyancing community together – I’m really looking forward to National Conveyancing Week 2024 – 11th to the 15th March!
The conveyancing industry excelled in 2023 with its charity fundraising. The Conveyancing Foundation Charity Lotto Members and Foundation Partner Charity Grant scheme allowed us to reach the incredible £ 1 million charity fundraising milestone this year! Well done and thank you all for your amazing charity endeavours! Jill White of Smoove is the latest Charity Grant Champion and recipient in raising money for the Motor Neuron Disease Association by running 50 miles…go Jill! Great work from Tom Bailey of Post Partner and the Legal Suppliers Chorus with their wonderful Christmas jingle – raising smiles, Christmas cheer, and some charity cash – thank you all. I’m not sure that any of us will top the Aconveyancing “It’s a Knockout” charity day earlier this summer and we look forward to hearing what Natalie and the team will be up to in 2024!
Despite the setbacks of 2023, I believe that the second half of 2024 will be a busy time for the property industry. We are seeing lenders start to offer affordable long-term mortgage products again with interest-only mortgages over longer periods likely to feature significantly next year to meet the challenges of the increased interest rates. Interest rates will come down I believe and have peaked, so it is a good time for purchasers to re-enter the market, with the house prices at their lowest for some time. I also believe that the government will succumb to some further SDLT holiday madness in an attempt to kick-start the economy and win some votes before next November’s General Election. What happens after the election well… let’s all try and get through 2024 unscathed first perhaps.
Wishing you all a prosperous New Year!!
January 5, 2024