FSA hikes mortgage broker fees by 33%

28 May 2010 | By Natalie Thomas

The Financial Services Authority has today released its annual funding requirements for 2010/2011, which shows mortgage brokers face a 33% fee increase.

Mortgage firms will now have to pay a flat fee of £1,000, compared to roughly £745 in the previous year.

Larger mortgage firms and networks will have to use the FSA’s calculator to work out what they will have to pay on top of the flat fee.

The Association of Mortgage Intermediaries had been campaigning for the regulator not to introduce the proposed fee hike.

It has previously estimated that based on what firms were charged last year, a £500,000 turnover firm is looking at a 32% fee increase, whilst a £5m turnover firm could see a 87% increase.

The FSA has increased its annual funding requirement for the mortgage sector from £10.9m in 2009/10 to £14.4m for 2010/11.

The regulator says its costs are increasing in terms of supervising the sector primarily concerning the work associated with the Mortgage Market Review and enforcement activity in relation to mortgage fraud work.

Overall the FSA’s annual funding requirement for 2010/11 is £454.7m, up from £413.8m in 2009/10.

Robert Sinclair, director of AMI, says the FSA proposals represent a substantial increase in fees for mortgage intermediaries who already face a tough economic situation.

He says: “Mortgage intermediaries were already paying a disproportionate share of regulatory costs, which are ultimately and inevitably met by consumers.

“For those mortgage intermediaries paying just minimum fees and who also hold insurance permissions the increase will be limited. But for larger firms, and those without insurance permissions, their FSA fees will rise in some cases disproportionately and significantly.”

He says the FSA has however decided not to raise the fee tariff rate for mortgage intermediaries from that proposed in the consultation paper, despite the considerable reduction in the tariff basis from that originally consulted on.

He adds: “We will continue to push for a fairer cost distribution system for the intermediary sector.”

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Readers' comments (30)

Anon | 28 May 2010 12:02 pm
Surely this means these increases will just be passed on to the consumer in increased 'broker fees'.
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Anon | 28 May 2010 12:04 pm
Someone has to pay for the 5* hotels these chumps stay in right?!
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Ian Mason | 28 May 2010 12:06 pm
and we keep on getting emails saying the fees for next year will be reduced thought it was too good to be true after all the FSA have to have their expenses dont they?
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Anonymous | 28 May 2010 12:10 pm
I like the way they blame the additonal costs on the mortgage market review. So whos idea was that then?
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Anonymous | 28 May 2010 12:11 pm
lending in decline,proc fee's reduced and the FSA justifiy increase fee's,for failing to supervise the lenders corectly,more brokers will be leaving the industry next year.
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john higgins | 28 May 2010 12:11 pm
This is further proof that the Association of Mortgage Intermediaries has no effect on the FSA whatsoever. They talk a great game but always fail to deliver.
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Barry Davis | 28 May 2010 12:13 pm
Well I how else can they replace their lost revenue from all the mortgage brokers that have gone out of business, they need to keep their jobs well funded (just like their pension scheme is !!!!!)

Now in these times good business practice and in their words TCF, they should be looking at cost controls to run thir business effectivly in the current market climate, maybe they need to spend a few million on a consultant to write them a business plan as they can't do their own very well
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Dazed and Confused | 28 May 2010 12:15 pm
Well, they have to pay for surveys on how the MMR will affect those of us who are left in the mortgage market after the FSA have finished squeezing the life blood out of us all!

Come on guys give us a break PLEASE?
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Anonymous | 28 May 2010 12:18 pm
that'll pay for the windows cleaned.
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Anonymous | 28 May 2010 12:18 pm
Incredible - we are all doing so much more mortgage business to cover the increased cost - village idiots springs to mind !!
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