MortgagesDec 19 2014

Proc fee competition hots up as another lender hikes rates

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Nottingham Building Society has become the latest lender to heed the call of brokers and pledge an increase in the procuration rates paid to introducing advisers, which will rise by 0.4 per cent to a maximum of £2,000 in January.

The move further emphasises the competition that has emerged in relation to proc fees, the commission advisers earn from organising a deal, following a call from brokers for payments to be increased across the industry in the wake of moves from individual lenders.

Yesterday, Accord Mortgages announced it will increase its proc fees across its residential mortgage range in the New Year, to 0.37 per cent for directly authorised advisers, 0.4 per cent for authorised representatives and 0.5 per cent on buy-to-let business.

In September Natwest increased the procuration fees it pays intermediary firms for completed residential mortgages, with Monmouthshire Building Society following suit for some types of its mortgages in November.

The changes by Nottingham apply to both residential and buy-to-let business. The maximum fee will increase from £1,500 to £2,000 on all new business and any existing applications that are at a pre-offer stage on 6 January.

Chris Parker, head of intermediary sales at The Nottingham, said: “As a 100 per cent intermediary business we really value the business advisers provide. After another record intermediary lending year in 2014 we want to ensure that 2015 is even more successful.

“We pride ourselves on delivering an excellent service to advisers and following a review of our procuration fees we believe the increase rewards advisers for submitting well packaged quality applications to The Nottingham.”

donia.o’loughlin@ft.com