Average rents in London have increased by 5.3% compared to last year, but the rate of increase is slowing down. Property transactions at law firms have decreased significantly this year, but there is hope for growth in the near future due to Labour’s housing reforms and declining interest rates.
Recent research conducted by Search Acumen shows that total transactions in the real estate market have dropped by 22% annually. The number of active law firms has also decreased by 130 in the same period, which is an 11% decline from a decade ago. The number of cases being handled by law firms has also decreased by 19% year-on-year.
This decline can be attributed to the weak housing market and the aftermath of the pandemic. Many law firms are eager to see growth, especially in the commercial real estate sector, as they strive to recover from the current low cycle.
Despite these challenges, there is optimism for growth in the industry. With increased investment stability and economic confidence, it is predicted that the year will end on a more positive note. The government’s plan to build 1.5 million homes in the next five years will have a positive impact on the real estate sector, including property law firms.
The recent decision by the Bank of England to cut interest rates by 0.25% to 5% is also expected to benefit the industry. This cut will provide relief to developers who have been facing higher costs for financing developments, and it will also encourage prospective buyers to enter the property market.
Overall, property law firms must prepare for potential growth in transactions and cases in the coming years. If the government follows through with its housing targets and the interest rate cut stimulates the market, there is hope for a more robust real estate sector in the near future.