Why conveyancing needs to embrace tech, now

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.