Increase in proc fees expected for BTL advisers

Mortgage advisers in the buy-to-let sector should see a rise in procuration fees paid by lenders later this year, it has been predicted.

Mortgages for Business chief executive David Whittaker has said that BTL advisers, particularly those writing portfolio landlord mortgage business, should see an increase in proc fees.

Speaking at the Financial Services Expo in Wales, Whittaker said that he had recently been at a closed event for buy-to-let lenders where one lender representative outlined their approach to paying for portfolio landlord business.

“One lender representative stood up in front of us all and said that in Q4 they will be paying more to brokers who are having to do more work on managed portfolio cases,” he said.

He suggested that when this lender moved, advisers could expect similar changes from others in the marketplace.

He added: “That change will force the others to move. When one goes, others will follow. It is good news that the market will be recognising your contribution and will begin paying for it.”

Whittaker said that while predictions for BTL gross lending had been downgraded by the CML recently – to £35bn in 2017 and an anticipated £33bn in 2018 – advisers still had opportunities within the sector, and that the lending figures did not necessarily take into account the value of product transfer business which increasingly lenders were paying for.