Conveyancing firms are warned to ‘prepare for the worst’ with a predicted economic crash imminent.

Trade body the Council for Licensed Conveyancers (CLC) has issued an ‘advisory note’ telling conveyancers to get ready for a 40% drop in business.

A looming recession the Bank of England has forecast, as well as rising mortgage rates and falling stock levels, make up the perfect storm scenario predicted by CLC.

The CLC is recommending that firms should stress test their businesses for resilience to a significant fall in work volumes.

Conveyancers may see property transactions plummet as the economy suffers a crash similar to 2008 when deals fell by nearly half.

The total turnover of CLC-regulated firms in 2009/10 was £85m, having recovered from the crisis. By 2020 it was £277m – a more than three-fold increase.

The year to April 2021 was of course exceptional, not least because of the SDLT (stamp duty) holiday deadlines, and there was an “astonishing” further 26% growth in turnover to £349m.

A different world

“It has been an extraordinary decade and a half. We are now entering a very different world, though,” CLC says. “Take steps to prepare your business.”

“There is a growing consensus that property transaction volumes look set to fall and some of you are telling us that there is already evidence of that,” CLC adds.

The CLC announced last week it was bulking up its enforcement powers to be a better regulator of the conveyancing sector.

CLC chief executive Sheila Kumar said that although the post-lockdown conveyancing boom did not lead to a growth in compliance failures, the CLC was clear that firms should not have taken on more work than they could cope with.