LexisNexis GLP Index: property law

Will demand for property law expertise grow, decline or simply stay the same in 2023?

The LexisNexis GLP Index pulls together the latest datapoints to provide some powerful predictions on the future of property law.

After several peaks and troughs, steady growth seems likely for property lawyers and conveyancers.

That's according to the latest GLP Index, which pulls from hundreds of datapoints to predict demand for legal expertise across multiple practice areas.

The property market across England and Wales is vast and broad. To get a true feel for the market, we looked at a lengthy list of different factors, including house building data, Help to Buy schemes, mortgage lending statistics, planning applications, and stamp duty taxes.

By taking a historic view of all these datapoints and others, the GLP Index determined that demand for property law expertise will grow by +7% in 2023.

Demand for the practice area has yo-yoed in recent years, with demand growing in 2019 (+9%), then dropping drastically in 2020 (-12%). While the pandemic made mainstream news for generating a significant amount of work for property lawyers and conveyancers, numbers for the first half of 2020 were bleak for both commercial and residential properties.

However, the GLP found demand shot up in 2021 by +9%, and while 2022 saw a small dip (-1%), property law is expected to accelerate in 2023.

Scroll down for in-depth research and analysis on the key trends driving change across property law.

Property law is predicted to generate 7% more work in 2023 than in 2022

A key stream of work for those working in property law comes through the development and sales of residential properties.

After several ups and downs during the pandemic, residential property new builds and sales figures seem to have stabilised.

When looking at Office of National Statistics data for 2021, the total number of dwellings completed in the UK sits at 174,930. This is on par with figures from 2019 (177,880), yet almost 20% higher than 2020 (146,630). The latest numbers for Q1 and Q2 of 2022 were on par with previous years, at 40,760 and 46,250 respectively (just under 50% of 2021's performance).

Total sales volumes from the Land Registry tell a similar story of stability. In 2021, there were over 900,000 sales in England and over 50,000 in Wales. This is significantly higher than the sales figures seen in 2020, sitting just shy of 700,000 in England and a little north of 35,000 in Wales.

When looking at the latest sales figures for England, there were 166,219 sales during for Q1 2022, 154,654 during Q2 2022 and 112,073 during Q3 2022. In Wales, there were 9,604 sales during for Q1 2022, 8,992 sales during for Q2 2022 and 6,266 sales during for Q3 2022. These figures put sales in England and Wales at just under half of 2021, at 46% and 49% respectively.

Visit the LexisNexis Residential Property page

Another key indicator of growth for lawyers working in the property market comes from mortgages lending statistics.

According to the Financial Conduct Authority (FCA), outstanding value for all residential mortgage loans sat at £1,667.1 bn at the end of Q3 2022. This is 4.1% higher than a year prior.

FCA data also revealed the value of gross mortgage advances in Q3 2022 was £85.9 bn - £8.0 bn more than the previous quarter, and 17% more than in Q3 2021.

When looking at interest rates, the share of gross mortgage advances with interest rates less than 2% above Bank Rate was 93% in Q3 of 2022, up 35.7 percentage points from a year ago, and the highest observed since Q2 2008.

The overall average weighted interest rates for all loans sits at a high of 2.721.

When looking at data for Loan to Value (LTV) ratios, 4.26% exceeded 90%. This is considerably higher than previous years, with the exception of 2019 where it hit 5.17%. The percentage of LTV ratios below 75% sits at 62.61% - the highest since 2018.

Growth across the commercial property market can be measured in a myriad of ways - one of which is through commercial decisions.

The total annual major decisions for 2021/22 sits at 1,772, while the number of commercial decisions granted sits at 1,656. This is a slight increase from 2020/21 figures, which saw 1,667 major decisions and 1,565 decisions granted.

Three years on from when the pandemic first struck and hybrid and remote working has clearly stuck. While this may result in reduced space requirements for businesses, it does not necessarily mean less overall cost, as businesses are seeking to ensure their offices are fit for purpose.

Visit the LexisNexis commercial real estate finance page