The Association of Mortgage Intermediaries has called on the FCA to explain why its levy on mortgage brokers and lenders is set to increase by 4 per cent, while the industry-wide increase is just 2.7 per cent per cent.
The FCA says that its budget for ongoing regulatory activity this year is £537.7m, up by 2 per cent on 2018/19.
In order to pay for this ongoing work, plus changes to its regulatory scope and additional costs relating to Britain’s exit from the EU, the FCA says its annual funding will need to increase by 2.7 per cent to £558.5m.
However, the watchdog is proposing that fees for lenders, brokers and mortgage administrators rise by 4 per cent year-on-year, which Sinclair points out is double the CPI rate of inflation.
Elsewhere in the paper the FCA anticipates that the actual sums paid by individual brokerages will drop by an average of 2.9 per cent this year due to an increase in the number of fee-paying firms and higher business volumes.
The cost for fee block A2, which is paid by “home finance providers and administrators” has been set at £17.9m, while the cost for fee block A18 relating to “home finance providers, advisers and arrangers”, is £17.6m.
Ami chief executive Robert Sinclair says the levy increase for mortgage advisers seems “disproportionate”.
He argues that the key regulatory changes stemming from Brexit affect the investment sector rather than the mortgage market.
While the FCA appears to have excluded brokers from the extra cost burden of the regulator’s Brexit work, it is not clear what has prompted the levy increase.
Mortgage lenders and administrators’ costs have been partly affected by changes in regulation of the securitisation market, but this has not been applied to brokers.
Sinclair says: “There appears to be no explanation in the report as to why such a significant increase is being applied to firms in the mortgage sector.
“I am not aware of any significant impact of Brexit on the FCA’s work in relation to mortgages.
“Ami has had no discussions with the FCA on Brexit-related issues affecting mortgage reguation because there were not deemed to be any.”