The cost of conveyancing, a crucial aspect of the home buying and selling process, has seen notable changes. According to recent data released by Compare My Move, the rising cost of conveyancing in 2024, reflects broader trends in the housing market and the economy.
The Rising Cost of Conveyancing in 2024
Compare My Move’s latest figures reveal that the average cost of conveyancing in 2024 stands at £1,353.00, marking a 4.5% increase from the previous year. This rise encapsulates the varying fortunes of buyers and sellers over the past year.
For those purchasing a property, the average cost of a conveyancer has surged by 18.7% compared to 2023, translating to an increase of £247. Conversely, for those selling a property, conveyancing costs have decreased by 10.3%, a reduction of £131. These contrasting trends highlight the shifting dynamics within the housing market.
Economic Context: Inflation and Base Rates
The conveyancing industry is still grappling with the aftereffects of significant inflationary pressures observed in 2022 and 2023. The Bank of England’s base rate remains high at 5.25%, contributing to a cautious approach among buyers and sellers.
From the end of 2022 to the end of 2023, the UK experienced a consistent drop in national house prices alongside a steady increase in the office bank rate. This economic environment has led to a general reluctance to engage in property transactions. However, there are signs that this trend is beginning to reverse as house prices start to rise again.
Market Shifts: A Buyer’s Market
The past year has been characterised by a buyer’s market, where buyers have had the upper hand. Despite the rising base rate, buyers have benefited from lower house prices, often securing properties at prices that were 10-15% lower than they would have been a year earlier. This dynamic has influenced conveyancing costs significantly.
The decrease in conveyancing costs for sellers by 10.3% can be attributed to the reduced number of transactions, as fewer people were willing to sell. On the other hand, the increase in conveyancing costs for buyers by 18.7% reflects the higher demand for purchasing services, balancing the overall rise in conveyancing costs just above the inflation rate of 4.5%.
Industry Insights from Compare My Move
Dave Sayce, Managing Director and founder of Compare My Move, provided his perspective on these trends:
“As we are well into 2024, we have seen a consistent rise in house prices and a drop in inflation. This should also bring a decline in the base rate later in the year, but for now, things are looking positive for the housing market. This will reflect on the conveyancing industry. More people will be buying and selling, and therefore we expect there to be a rise in both purchase and sale services, as well as a significantly higher increase in the overall cost of conveyancing.”
The Role of Digital Conveyancing
Another significant development in 2024 is the increasing focus on digital conveyancing. The goal is to enhance the efficiency of the process for both clients and conveyancers. Sayce commented on this trend:
“There has also been a bigger focus on the digital side of conveyancing in 2024, with the aim to make the process as efficient as possible for both client and conveyancer. Although I don’t think this will have much of an effect on the cost of conveyancing in 2024, it should eventually bring the cost of conveyancing down, as the process will be shorter and smoother.”
Conclusion
The conveyancing landscape in 2024 is shaped by a mixture of economic pressures and market shifts. The average cost of conveyancing has increased, driven by a substantial rise in costs for buyers and a notable decrease for sellers. As the housing market continues to evolve, with rising house prices and a potential decline in the base rate, the cost of conveyancing is expected to remain a critical consideration for both buyers and sellers.
