Robert Sinclair, chief executive of Ami, said this would lead to a flat economy, adding: “While credit easing and money supply levers are pulled to encourage activity and lending, regulators are bearing down on the banks to increase their capital ratios.”
The Financial Policy Committee claimed in March that banks needed an additional £25bn in capital to cover further losses.
Mr Sinclair said: “This demonstrates the schizophrenia at the heart of policy-making. All other things being equal, this means less lending and less profitable banks – not a good way to encourage a return to brisk activity and at odds with the policies such as the extension of the Funding for Lending scheme and Help to Buy.”
Mortgage fees continued to rise as rates dropped and moneyfacts.co.uk calculated that the average fee was £1522, the highest in 25 years.
Mr Sinclair said there was concern that escalating fees may discriminate against lower-end borrowers who already faced an uphill battle to save for a deposit and the cost of stamp duty.
In this environment advice will be more crucial than ever and prospective borrowers would need the insight of intermediaries to navigate beyond headline rates to find the most affordable and appropriate mortgage products.”
Gerry Weir, director of Edinburgh-based Cornerstone Mortgage Consultants, said: “There is lots of activity in the market – lenders are lending.
“Arrangement fees are just one part of the equation though. You should never look at fees or rates in isolation, but at the total cost of the mortgage for the period agreed with the client.”
The UK economy is forecast to grow 0.7% in 2013.
Wages have declined by 2% in real terms as inflation outstrips pay rises.
Gross mortgage lending was up 2% year-on-year and forecast to hit £155bn this year.