Property law transactions at historic lows but firms ‘must prepare’ for growth
Transactions at property law firms have sharply slid back to pandemic-era lows this year, but firms expect Labour’s housing reforms, as well as falling interest rates, to create an onslaught of cases in the coming years.
New research by legal data supplier Search Acumen, shared exclusively with Morning Wire, has found that total transactions across the residential and commercial real estate markets are down by 22 per cent annually.
The number of active law firms has fallen by 130 in the same period, the data showed. This is an 11 per cent drop from a decade ago, from 4,317 in 2014 to 3,857 in 2024.
Case loads, too, have dropped by a huge 19 per cent year-on-year.
This is both a product of the weak housing market and a post-pandemic lull; during Covid, a huge backlog of caseloads built up which has only recently been cleared.
Despite the reprieve from backlog chaos, many law firms are keen to see more growth in these figures – in particular for the commercial real estate market – as the industry “tries to climb out of its cycle low”, Search Acumen said.
And growth, it seems, is on the way.
Property law firms ‘must prepare’ for growth
With increased investment stability and economic confidence that a new government could bring, levels are predicted to end the year on a more positive note.
“With housebuilding comes increased investment from both the private and public sectors to support the real estate ecosystem.
“If Labour delivers, we could see a very different picture for transactions and caseloads this time next year… law firms must prepare,” Andrew Loyd, managing director at Search Acumen, said.
Chancellor Rachel Reeves has restored mandatory local housing targets as part of the government’s pledge to build 1.5m homes in the next five years.
It’s a tough target to reach, with UK housebuilding in this first half of this year at its lowest since records began, but a successful policy will boost all businesses involved in the sector – including property law firms.
The August decision by the Bank of England to cut interest rates by 0.25 per cent to 5 per cent should help the industry, too.
“On the supply side, developers have been hamstrung by the pressure of higher costs for financing developments, slowing down the completion of schemes and their profitability [and] on the demand side, high interest rates have kept prospective buyers off the property ladder for longer,” Chris Gardner, chief executive of Atelier, said.
“[The] interest rate cut will offer much-needed relief for the market… It is the catalyst we have been looking for to get the property market moving again,” Gardner said.