MIDAS SHARE TIPS: Moving home? How website ULS Technology can help ease legal headache
Buying or selling a home is invariably more expensive, time-consuming and stressful than anyone cares to imagine before they first embark on the process.
The legal procedure only adds to the strain, with conveyancing solicitors frequently demanding new information, calling up at inconvenient moments and presenting a hefty bill at the end.
ULS Technology strives to make matters smoother and cheaper. The company joined the junior AIM market in July 2014 at 40p and the shares shot up to almost 70p by last summer. They have since fallen to 55½p. At this level they are undervalued and should go higher both this year and in the longer term.
Housing business: USL is a comparison website enabling banks and mortgage brokers to compare prices and services from conveyancers
ULS was founded in 2003 by financial adviser Nigel Hoath and software entrepreneur Andrew Weston, both of whom took the view that the conveyancing market needed shaking up. They created a comparison website, enabling banks and mortgage brokers to compare prices and services from conveyancers.
Over the years, more and more solicitors have signed up to the website, so there are now about 220 law firms, encompassing about 2,000 individual conveyancers. ULS has also attracted customers such as Lloyds Banking Group, the UK’s biggest mortgage lender, as well as 4,000 mortgage brokers, including all the top players.
The product that ULS provides, eConveyancer, is simple but effective. When would-be homebuyers or sellers visit their bank or mortgage broker, they will be asked if they need a conveyancing solicitor. Some will have hired a lawyer already. Many will not.
The banks and brokers then log on to ULS’s website and enter their customer’s details. A list of prices from conveyancers will pop up, much like on other comparison websites.
But there are a couple of differences between those sites and ULS’s. Those other sites tend to act as providers of information, primarily focused on price. However, ULS monitors the progress of the conveyancing process and can help consumers if problems arise. It also provides service ratings so people can see not just how much conveyancers charge but also whether previous clients were satisfied with their services.
ULS makes its money by charging the conveyancer a fee whenever a new customer signs up. It works primarily with banks and brokers, though individual customers can talk to the company once they have chosen a conveyancer with their mortgage provider. But ULS does provide the eConveyancer product to comparison website MoneySupermarket, too, so homebuyers and sellers can use it directly.
The business has grown steadily over the years and is used by thousands of people. But many of them do not realise whose product they are using, as MoneySupermarket and other businesses have branded eConveyancer with their own name, so it looks like their service rather than ULS’s. In each case, however, the savings on conveyancing are considerable, averaging more than £500 per customer and increasing to about £1,000 in more expensive parts of the country.
Looking ahead, the company is keen to expand by adding more business customers, increasing its exposure to consumers and broadening the services it offers.
Hoath and Weston are still on the board, but a new chief executive, Ben Thompson, was brought in when the company floated.
Under his watch, ULS launched estateagent4me, which enables consumers to compare estate agents in their area, using criteria such as which agents sell homes quickly, which sell nearest to the asking price and which have the biggest market share in any given neighbourhood.
In March, ULS bought a 35 per cent stake in online advisory forum HomeOwners Alliance, which now includes the eConveyancer service. Also in March, Thompson launched a will comparison site, so hundreds of mortgage brokers are now offering this service as well.
ULS will announce its results for the year to March 2016 in June, just after the Brexit vote. Brokers expect profits to climb 31 per cent to £3.8million and they are looking for a dividend of 2.1p per share, up from 1.34p last year. Profits for the year to March 2017 are expected to be at least £4million, with a dividend of about 2.2p per share.
Midas verdict: Economic figures have been gloomy this week and consumer confidence is clearly at a low ebb. But demand for the eConveyancer product is strong and several banks and brokers are thought to have signed up for it since the ULS financial year end. Thompson is ambitious, too, and given that his products help consumers – and save them money – he should do well. The shares, which closed at 55½p on Friday, are a buy.
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