The Association of Mortgage Intermediaries (Ami) has complained about the impact of the Financial Conduct Authority’s (FCA) latest costs and fees consultation.
On April 5 the regulator released its business plan and budget, including draft fees for the year 2016 to 2017.
Most categories will see a 1.6 per cent fall in costs, but mortgages have an increased funding requirement of 8.7 per cent, leading to a net increase of 7.1 per cent.
While the regulator claims to have held its costs flat, mortgage brokers and lenders will see their funding requirement increase as the second charge regime is integrated into the existing regime.
Robert Sinclair, chief executive of Ami, noted this may not be quite as bad as it seems, as the FCA is estimating a 10 per cent increase in firms’ declared income, so the amount a firm will pay falls by 2.3 per cent on a like-for-like basis.
However, this masks the fact that £3.1m has been added to the costs of mortgage lenders and brokers to supervise the second charge regime.
The total bill for lenders and brokers now stands at £36.8m and Ami said it still awaits a proper explanation on why this is costing this much.
Mr Sinclair said: “When the £200 annual fee for holding the consumer buy-to-let permission is added, plus the hidden Financial Ombudsman Service (Fos) levy, together with £300 minimum annual fee for consumer credit – this makes the new bill for the smallest firms look increasingly expensive.
“What was £1,000 only two years ago can now be a staggering £1,619 for the same business.”
peter.walker@ft.com
