The Financial Services Compensation Scheme is set to double the levy on mortgage intermediaries from £5m to £10m for the 2016/17 year.
The FSCS does not go into detail about the reason for the large hike, but says in its 2016 Plan and Budget report that it was seeing an increase in eligible claims against the home finance intermediation sector.
The scheme has upped its prediction about claims brought against the sector to 600 in 2016/17, up from 559 in 2015/16.
The FSCS says that more valid claims are being brought in cases where negligent advice was given around investing in overseas property schemes.
The body predicts that consumers will get around £7m for home finance advice claims brought in 2016/17.
That’s just what the remaining 8 to 9 thousand mortgage brokers wanted to hear. An increase in their levy to cover the claims that come in from a former broker population of over 100 thousand.
Bearing in mind that the remaining population are the cream of the crop to have maintained a quality of education, advice and service through the last 9 years at least suggests they are at far lower risk of having any advice issues than those that have already hung up their qualifications and left for good.
Overall, this just makes good mortgage advice more expensive for those that need it and takes it further out of reach for those who can only just afford it now. Where do they go for advice now? The Money Advice Service?