In a world where more and more transactions are going digital, property sales remain archaically analogue. Can conveyancers break the shackles of tradition and adopt tech to make everyone’s lives simpler?
Edward Amdur successfully remortgaged his property in July 2020, yet one key element of the conveyancing process – the legal transfer of title from one party to another – still isn’t complete.
“I ran a search on the property a few weeks ago and there was still no update,” he says. “The freeholder’s name has yet to be changed on the Land Registry.”
Amdur knows all too well that his situation isn’t unusual. As MD of London-based estate agency Tatewood, he often works with people who struggle to get timely resolutions to conveyancing issues.
While all other parts of the property industry have embraced new tech, the legal side has not shown similar enthusiasm. That’s a real problem when the market is booming, thanks to the stamp-duty holiday, and agents are still dealing with a transaction backlog caused by the Covid-induced hiatus in activity in 2020.
Tom Ansell, head of residential conveyancing at law firm Shakespeare Martineau, believes that technology in conveyancing has actually “come on in leaps and bounds over the past decade. Some law firms have been adopting lots of tech really quickly.” The problem, he explains, arises whenever a transaction chain involves any of the many firms that have yet to make the leap.
Too much choice?
“Conveyancing is being made all the more cumbersome, manual and fragmented by legacy constraints in digitising the processes of asset transferral and ownership authentication,” says Jaco Vermeulen, CTO of digital transformation specialist BML Digital.
He believes that the main constraint is “not legality, but the attitude to embracing change”, yet not everyone agrees with this view. Although a handful of law firms may be steadfast Luddites, the industry consensus is that most do want to modernise but are confused by the variety of solutions available to them – and making the wrong purchasing decision here could prove costly.
“Some might be slightly blinded by that choice,” Ansell acknowledges. “In an industry that’s operated in much the same way for hundreds of years, adopting any new process takes time. This might sound like a long way off, but I’d hope that the sector is fully digitalised by 2030.”
The market’s bottlenecks can’t be blamed on the lawyers’ slow digital transformation alone, argues Jonathan Hopper, CEO of Garrington Property Finders. He explains that “a lot of important tech innovations rely on primary data coming from public sources, such as local authorities. Until their processes catch up with where the private sector is at, the market will remain hamstrung.”
It seems crazy, he adds, that problems accessing information digitally are still delaying transactions in this day and age.
For its part, the Land Registry states that it has “always focused on how we can enable digital conveyancing. By accelerating our plans for the adoption of digital ways of working – notably, in relation to digital signatures and identity checks – we are supporting the property market now and developing its efficiency and resilience for the future.”
Why sector-wide action is needed
Hopper believes that the industry as a whole – including the way that property transactions work in the UK – is a key contributor to the frustrations felt by all participants. “There’s a lot in the fact that, actually, the whole system is antiquated,” he argues. “Is it fit for purpose?”
Amdur observes that the risk of making an expensive mistake in the conveyancing process has contributed to law firms’ wariness about embracing digital tech. “Solicitors like to do things manually, because it means that they do a more thorough job,” he says. “You’re stuck between a rock and a hard place, where consumers want things to be done more quickly, while conveyancers believe that this would create too much potential for error.”
Alison Taylor, a lawyer in Mishcon de Reya’s property team, agrees with his assessment. “We are bound up with a huge amount of red tape. We must ensure that anything we do complies with the regulation,” she says, adding that lawyers have to decide whether they’d want their law firm to be the first to need to theoretically defend their use of a new system in court, should it go wrong.
Admittedly, the overheating property market has exacerbated the problem for conveyancers, who’ve been inundated with work. Solicitors in the UK handled 5,829 house sales every day of March 2021, according to HMRC. That’s the highest number since records began in 2005.
Since the start of this year, the law firm to which Tatewood has regularly recommended its clients has been unable to handle any more, so Amdur has temporarily stopped making referrals.
“It’s a small firm that’s been processing more than 70 completions a month because everyone’s been rushing in,” he says.
One positive side effect of the latest crunch on solicitors’ time is that it could spur the profession into action, according to Ansell. “We’ve got a kind of focus on this problem at a high level, which is filtering down through the industry,” he says.
Amdur agrees that any concerted industry-wide effort to tackle the problem should be good for buyers and sellers. “Having a situation where everyone can obtain the information they need quickly will speed up the whole process massively.”
Although it has already been extended once, the stamp-duty holiday is due to end in England and Northern Ireland on 30 June, when there will be a staggered return to the previous set of tax bands. If all goes to plan, that should have a cooling effect on the market and gradually ease lawyers’ caseloads. But, until that happens, many overworked conveyancers will be obliged to leave the task of managing any kind of digital transformation on the back burner.