The perfect storm
In 2021, the housing market broke, with huge logjams in conveyancing chains resulting in months of delays on sales. Richard Reed looks at what went wrong – and what can be done to prevent it happening again.
“There just simply weren’t enough conveyancers, there weren’t enough surveyors – you had the challenges of local authorities working remotely leading to search delays, and not being able to book removal firms because they didn’t have a date free. The whole supply chain was just peppered,” says Tom Gilbert, Head of Estate Agency Services at SortMove.
That’s why it was the perfect storm. Nobody enjoyed it, nobody liked it, but it’s what we had and it’s only just starting to normalise. Tom Gilbert, SortMove.
“The biggest challenge was stressful clients – they felt the pressure to act quickly because of how many other buyers wanted that property – they agreed to buy but weren’t able to move quickly because of those stresses in the supply chain. “That’s why it was the perfect storm. Nobody enjoyed it, nobody liked it, but it’s what we had and it’s only just starting to normalise.”
Peter Joseph, CEO of The Moving Hub, agrees. “It pretty much broke across the UK,” he says. “On a normal day you expect X number of people to come through the door every day; a business run well will have enough people to cope with that and a tiny bit of capacity left over. If all of a sudden you get three times, four times the amount of people walking through your door at a moment’s notice, every business is going to be under strain. “In the short term you take on more staff, which became more difficult because everyone wanted to take on more staff. There aren’t that many spare solicitors or conveyancers out there.
If all of a sudden you get three times, four times the amount of people walking through your door at a moment’s notice, every business is going to be under strain. Peter Joseph, The Moving Hub.
‘It took six months to calm down’
“Most people promise to look at emails within 24 hours, that went to 72 hours. You would normally be exchanging in 8-12 weeks; that was doubled. That was the main problem – that was what broke. The Government shut the doors for three months when Covid was rife and then all of a sudden they thought, ‘Let’s open the property market back up again’. The whole time those doors where shut for three months, people were still doing virtual tours, people were still getting offers on their houses. When they opened the doors there were three, four, five times the number of people running through those doors.
“On the purchase side, at one point we were getting daily lists form the biggest search provider in the UK saying, ‘This council is now shut, they have closed their doors to anyone walking in to pick up a search’.”
Joseph added, “That process probably took six months to calm down and get back to 150 per cent of volume, then there was an exodus of people who wanted to move out of the city because they knew they were going to be working from home.
“Then the Government announced the Stamp Duty holiday. So actually, we only came out of it back to comfortable levels probably about October/November last year.”
He says that another issue that added to the chaos was that many conveyancers weren’t keeping agents up to date with developments.
“My belief is that most of those companies that make up the bulk of conveyancing in the country don’t use the tools they’ve got on their CRM systems to push notifications to estate agents,” he states. “The facilities are out there, but they are underused. All the key milestones should be made clear and transparent via the CRM system.”
To help deal with any future challenges, The Moving Hub has increased its panel of solicitors and bought a conveyancing firm.
Carl Brignell, CEO of Elite Conveyancing, shed some light on why things got as bad as they undoubtedly did.
“Conveyancers are typically very poor strategic planners. The problem we’ve always had is that when the market picks up, service standards drop. It’s largely driven by greed – the big firms want to make as much money and get as many cases in as possible, regardless of how it affects the wellbeing of their lawyers or the service of their clients.
Conveyancers are typically very poor strategic planners. The problem we’ve always had is that when the market picks up, service standards drop. Carl Brignell ,Elite Conveyancing.
“The smaller firms never realise they are over capacity until they are over capacity, and everybody’s moaning.
‘We turned work away to protect our reputation’
“We got to the point where we were turning work away to protect our lawyers and our reputation. We could have made a quick buck last year, but we chose longevity over short-term profitability.” Brignell says that at the start of any month he knows what Elite’s capacity is and how many cases he can take on while still delivering a “tip-top service”. He then monitors the processing rate on a daily basis. “If ever it goes over that then alarm bells start ringing to say we’ve got too much work coming in here, we need to reduce it somehow,” he explains.
Ben Ridgway, Group Managing Director at IamProperty MoveButler, says that while local council searches and other pandemic-related issues were undoubtedly major issues last year, “the real problem was an additional 300,000 transactions, 20 per cent more than average, with probably 20 per cent fewer conveyancers”, with many quitting because of the stress of having to deal with the chaos of 2020.
There are three packets of data in a transaction: the title, the protocol and the searches – and in each of those areas we have been looking at how we can digitise it. Ben Ridgway, IamPropert.
So, what can be done to make sure this situation never happens again? While there would always have been challenges, with the coming together of Covid restrictions and the Stamp Duty holiday, the property industry can’t afford a repeat of last year’s chaos.
Tom Gilbert at Sort Move believes the answer lies in what is known as ‘frontloading’ the conveyancing process – in other words, getting as much information about a property ready up front, even before a buyer appears on the scene. As a result, while the industry average in 2021 was roughly 18 weeks from sale agreed to exchange, Sort Move’s average has been just under 12 weeks.
“The problem is, if you stick to that age-old process (get the instruction from the buyer, sign terms of business, await the draft contract from the seller’s law firm, await the survey result, etc) it’s going to take 18-19 weeks. Well before the pandemic we put a free buyer-protection policy in place on all Sort Move cases which covers them if the deal fall through, and the reason we did that was to encourage buyers to pay for their searches on day one.”
Getting vendors sale-ready
Sort Move has a product called Fast Start that is designed to get a vendor sale-ready when they first come on the market. “They electronically sign their protocol firms, they do their ID and AML checks online, it’s integrated with the Land Registry so we get the titles, they can upload all their supporting documentation such as permissions, guarantees etc – all that cuts three to four weeks off the conveyancing process,” says Gilbert.
Sort Move offers case tracking for agents and their clients via its mobile web platform and is in the process of upgrading it to allow greater transparency on key milestones for everyone involved in the process, including mortgage brokers and surveyors. “Everybody would much rather log on to something and say, ‘Right, 1 Acacia Ave – where are we up to?’ And that broker would love to just log on to something and see the milestones and not have to make a phone call or send that email.”
Ben Ridgway agrees. “We have been working to prepare properties up front for sale. There are three packets of data in a transaction – the title, the protocol and the searches – and in each of those areas we have been looking at how we can digitise it and provide early warning signs on the title and gather information about things that might need sorting early,” he explains.
“The other thing we are working on is to do the same with search results – analyse them automatically and raise additional enquiries so that when the information set goes over to the lawyer, they have got all the additional information they would have needed to analyse, and we have hopefully provided all that for them up front.”
Ordering searches up front
MoveButler has its own app for agents, buyers and vendors, and the conveyancing module went live in December. “We are also allowing clients to decide how legally prepared they want to be, and over 30 per cent of clients are opting to provide all the information up front.” A significant proportion also order searches up front to speed up the sale process.
“Consumers really like it because it makes it really simple for them,” adds Ridgway. “They can send documents, messages, ask for updates and view their own legal documents, while for vendors we will tell them about their title and the things that might cause delays.”
Over at Mio, which produced that report pointing the finger for last year’s chaos at conveyancers, managing director Phil Natusch believes the firm’s app helps manage people’s expectations. “Otherwise you’re just blundering on regardless, with no clear idea of when things are going to complete,” he says. “When it’s used effectively it’s a very efficient tool and brings clarity to where the problems lie.”
There is a movement in the industry for more up-front information and Mio is very well placed and aware of that, and we will be releasing quite a lot over the coming year. Phil Natusch, Mio.
The app offers transparency across the complete chain both for agents and their clients, though he admits it does require someone to start building the chain. “But if one agent starts, the others can see what’s going on and join in,” he explains.
Natusch says Mio is focusing on frontloading by adding local searches to the platform, so they can be ordered straight away if there’s a delay at the council. “There is a movement in the industry generally for more up-front information and Mio is very well placed and very aware of that, and we will be releasing quite a lot over the coming year,” he states.
That will include qualifying the property so more is known at the beginning, and Mio has all the necessary Land Registry information – is it freehold or leasehold, what the boundaries are, and so on. In June there will be a full integration with the property industry’s most popular CRM Reapit, providing a seamless transfer of data.
Tracking sales progression, step by step
Another player in the sales progression space that shouldn’t be overlooked is Moovshack – perhaps better known as a sales portal, but fast becoming a must-have tool for all stages of the house-buying process. Moovshack Pro has a range of features that save time, reduce costs and help prevent sales breaking down, such as a completion tool that automatically syncs agents with buyers and sellers and tracks the sales progression process step by step, keeping all key stakeholders instantly updated on progress and any issues that may occur.
But while tech may help smooth the process, not everyone agrees that it offers the complete solution. Back at Elite, Carl Brignell is as active as anyone in the conveyancing industry in terms of frontloading cases, but rather than relying on the firm’s CRM system to update agents when key milestones are reached, he believes in good old-fashioned dialogue and communication. “We are constantly drip-feeding information to the agent and the client,” he says. “We’ll know early on if there is a big issue with one of those searches or the title and we will notify everyone in the chain, together with a solution as to how to deal with it – so by the time we are ready to exchange contracts, we have done all our work and everybody has been kept up to date along the way.
“I think the panic comes from clients and agents when, in the old-fashioned process, there’s a lot of excitement up front, they fill in all their forms and then don’t hear anything for six weeks.”
The complete breakdown in 2021 is certainly a situation that no-one – whether they be an estate agent, conveyancer or mortgage broker – ever wants to see repeated. In the final analysis, the answer seems to be getting as much information as possible up front – and better communication between all parties involved. And while tech can remove the need for many time-consuming calls, sometimes there really is no substitute for just picking up the phone.
Too slow? Do it yourself!
So all are agreed there is a lot of work to do and being done to avoid another ‘perfect storm’. The latest company to step in with a new service, is coming at the problem from another angle entirely. YouConvey does what it says on the tin; the service enables vendors themselves to get involved in the sales progression process. Such an approach probably has agents and conveyancers alike, all shouting “Nooooooo!” in unison. But maybe there is something in it, where the client can be a force for good for all involved for all sides.
The man behind YouConvey is Eddie Goldsmith. “I have worked in the conveyancing sector throughout my career and understand the activities that slow the process down and what a stressful experience moving home is,” he says.
By providing our customers with direct access to property documentation… we are looking to improve the customer experience and reduce the timescales. Eddie Goldsmit,h YouConvey.
“By providing our customers with direct access to property documentation and with the help of our Home Mover Advisors we are looking to improve the customer experience, reduce the timescales of a typical transaction and work better with all the stakeholders in what is generally accepted as an extremely stressful experience for home movers. We will be able to significantly reduce the time between offer and exchange by working with all the parties collaboratively to shorten what is an unnecessary long and protracted process.”
By completing admin tasks often assigned to busy conveyancing teams, home movers can reduce the time for their particular transaction considerably by up to eight weeks, Eddie claims.
YouConvey customers will still be able to rely on professional support for all the legal aspects of the transaction from regulated conveyancers but with the added assistance of specialists who will guide them throughout the process.
There is no doubt things can only get better in conveyancing and clearly there are many who are doing all they can to make it happen.
