The best was the Council of Mortgage Lenders’ analysis of the housing market when the Queen was crowned in 1952. Seven years after the end of the Second World War and there were some 800 lenders in the market. Yes, that’s right, 800 – now the CML’s membership is made up of 109 lenders.
Obviously six decades of mergers and acquisitions has had a lot to do with today’s small number, but so have the credit crisis and the inability for many new banks to get past the barrier to entry put up by the Financial Services Authority.
Lack of finance is making it difficult for borrowers to get loans and it’s even tougher for brokers to earn their crust.
So it was little surprise to hear in the FSA’s Annual Funding Requirement last week that the income tariff data it receives from mortgage intermediaries has dropped by 10%.
But rather than tighten its own belt to cover the fall in income, it’s whacking up fees for an industry that is clearly struggling.
The old self-regulatory body – the Mortgage Code Compliance Board – charged a one-man band broker £120 and had a running cost of £4m. The FSA is looking at an overall cost for 2011/12 of £559.8m.
The regulator has been expensive from day one. When the MCCB closed in 2004 its £45,000-a-year compliance investigators were employed by the FSA on £80,000 – doubling costs overnight.
With brokers paying ever more for the FSA it’s time for a thorough and independent cost benefit analysis. This why we’ve kick-started our Bring Down FSA Fees campaign.
It may be going, but it’s high time the FSA cut its costs rather than financially crippling the industry it’s meant to be regulating.