In common with virtually every sector of the economy, the housing market suffered a downturn during the Covid-19 pandemic. At the time of the first lockdown, which was so comprehensive that the skies were virtually cleared of aircraft pollution and major roads fell silent, it was impossible to predict how quickly and to what extent the economy would recover.
Surprisingly, the property market escaped the privations of many other industries and stayed relatively strong throughout. Although in-person viewings were almost impossible in the spring of 2020, demand remained resilient. One of the reasons for this was that the home became a place of even greater importance than in normal times. As people were instructed to stay at home, millions adopted remote working and many took this opportunity to move away from the cities to buy homes in areas where prices were lower and money could buy more space.
Government support for the industry helped considerably, with the stamp duty holiday and the new mortgage guarantee bringing property purchases within the reach of first-time buyers. According to Land Registry figures. there were 1.26 million property transactions in the financial year 2021/22, a new record. After the initial contraction during lockdown, the market bounced back with renewed vigour.
How Conveyancing Needs to Change
The conveyancing news was good. However this sharp increase in demand inevitably put pressure on an industry which had feared the worst and was not prepared for such an early and rapid recovery. On the whole the largest firms were able to accommodate the changes in the post-Covid market while the smaller ones with very modest market shares struggled to remain competitive. The number of firms available to service demand has declined. Modernisation is now urgent.
Conveyancing firms need to respond to the changes in employee expectations and behaviours that have occurred across much of the economy. In order to attract and retain the best talent, they must offer flexible and remote working. The pursuit of a good work-life balance has long been an aspiration and since the pandemic, it has become a priority. Firms of all sizes are adopting this new model to increase their capacity. Many of them are choosing to partner with concierge services such as Sam Conveyancing which gives conveyancers wider access to the market while offering a broad choice to buyers and sellers.
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The Future of the Housing Market
Having undergone geographical changes, the housing market is now facing the new challenge of the cost of living crisis. Inflation is heading for record levels and the Bank of England is embarking on a series of interest rate rises for the first time in 15 years. Meanwhile, Ofgem is raising the energy price cap to levels which will squeeze household budgets alarmingly. Higher interest rates – with the prospect of further increases to come – are already affecting the property market, although this is not an entirely unwelcome development. It appears that house prices are still rising by about 5% but at a slower rate which should help to stabilise the market. Some prospective buyers have grown cautious about committing to more expensive mortgages while others are racing to beat the upward movement and secure fixed rates while they are still affordable.
If, as predicted, prices flatline in 2023 and interest rates reach a peak of 2.5%, then the housing market will avoid the trough of 1993 and the negative equity which afflicted home owners. The smartest and most flexible conveyancing firms will weather the storm, provided that they adopt recruitment strategies appropriate to the new environment.