These days, it seems everything needs a phrase. Ideally of three words.
At least, that’s what it seems when you look at the utterances from 10 Downing Street – who can forget “Build Back Better” or “Hands Face Space”.
When it comes to the home buying and selling process, “The New Normal” seems popular and if this is the case, we’re in a whole heap of trouble.
We had a few spare minutes when we weren’t sitting around eating bonbons, so we looked at how long deals were taking since the end of the Stamp Duty holiday in October when things were supposed to get back to normal.
What we found was not particularly encouraging. Our average transaction times jumped from 12 weeks in September 2021 to 17 weeks in March this year.
So what’s happening and what, if anything, can we do about it?
It’s complicated – no surprise here.
Like everything to do with property, finding out what is going on is tricky.
It’s no surprise that chains are seen as a major culprit – they get blamed for everything. If only Boris Johnson had said his lockdown party woes were due to chains, everyone would’ve nodded sagely, agreed, and moved on.
The problem is that chains themselves are not necessarily the issue, but a failure of a component within them. Someone forgets to apply for a mortgage, a lawyer refuses to draft a deed of variation or a co-freeholder can’t be bothered to sign a transfer – all the usual stuff.
However, what has changed is that chains used to typically be 2-3 properties, whereas now we often see 5-6. Agents tell me this is caused by disconnected chains joining together as the rental market is moving too fast for the person at the top to move into rented accommodation.
In any event, this issue is not going away soon.
Maybe remote working isn’t all it’s cracked up to be
There’s no easy way to say this.
It’s becoming increasingly difficult to speak to other lawyers. When you call a law firm, too often the person answering the phone apologetically explains that the lawyer is working remotely, so they cannot put the call through and it’s best to email.
Which is frustrating, particularly when clients complain that “the problem with you lawyers is you don’t pick up the phone to the other side”.
After two years, surely it not beyond the wit of business owners to give their lawyers mobile phones and a way to transfer calls to them. Maybe even electronic access to the details of their files. If firms are going to allow their lawyers to work remotely, they must give them the tools to do the job; and that doesn’t mean suitcases for carrying files to and from the office.
Lack of urgency
In the halcyon days of 2021, people had dug out their pitchforks and were busily making hay with a palpable sense of urgency. This just doesn’t seem to be happening these days.
We suspect it might be caused by increased caseloads, potentially due to fewer staff so lawyers simply don’t have the time to follow up.
There is also a feeling that buyers are not pushing hard to get deals through.
Finally, it could be due to general weariness – let’s face it, property lawyers have had a tough few years, and candidates tell us of gruelling working hours which will take their toll.
Lack of experience
Battle-weary experienced solicitors are complaining about the problems caused by a lack of experience in lawyers running cases. They have a point, in that this can result in more enquiries being raised, delays in clauses being drafted, and an inability to take decisions, which does result in delays.
However, this problem is caused by a lack of training and support which means inexperienced staff simply have too much responsibility. This is due to the way that owners of law firms are running their businesses and only they can address this issue. They must reduce the caseloads overall, and in particular, for their senior lawyers so they can supervise junior lawyers. This can only be achieved by increasing the fees that they currently charge, and be prepared to reduce the money they take out of the business.
So what happens now?
Everyone knows that slower deals impact the finances of law firms and agents. Last year, we exchanged 90% of our pipeline in 90 days, compared to this March where it dropped to 55%.
Fewer deals mean less money, meaning fewer staff – not a pleasant spiral in anyone’s world.
Caseloads must be reduced by increased pricing and the process, in particular, enquiry handling, must be streamlined to reduce the delays.
Unless this happens, business owners may need to learn another three word phrase in the future; “Heaven Help Us”.
as published in https://propertyindustryeye.com/if-this-is-the-new-normal-heaven-help-us/