In its Annual Funding Requirement consultation paper the FSA said it planned to increase mortgage advisers’ fees payable to the regulator from £13.12 per £1,000 of income to £13.43 per £1,000.
It also anticipates that the number of fee payers will increase by just three firms from 5,729 to 5,732 over the coming year.
But it predicted that the total fees generated by mortgage writers would fall 3.9% from £15.1m in 2011/12 to £14.5m 2012/13.
This would equate to a £71.2m drop in revenue from the fee block which affects mortgage adviser firms.
Robert Sinclair, director of the Association of Mortgage Intermediaries, said: “The amount of fees for brokers always seemed on the high side especially because we’re still paying for the Mortgage Market Review and there’s still no effective individual registration.”
Meanwhile Kevin Duffy, managing director at Mortgageforce, said the predicted fall in mortgage revenue should not scare brokers who should focus on generating income through protection sales.
Mike Fitzgerald, sales director at EMBA group, agreed.
He said: “The decline in revenue should be taken with a pinch of salt as mortgage brokers will do so much more than just the normal regulated activity.
“Some will be able to cope better than others but one thing is for sure, the calibre of brokers has improved to no end from where they were 18 months ago.
“As with any payments this year, I don’t think many will be surprised by the increase in FSA fees.
“Expenses are going up everywhere from heating, lighting to fuel. A rise in FSA fees is just another expense on top of that and one that we will ultimately have to deal with.”
David Sheppard, managing director at Perception Finance, said he didn’t agree that mortgage advisers will witness a £71.2m drop in revenue.
“I don’t think lending will go down that much,” he said.
“But then again that brings about questions of how much will a broker earn from writing a mortgage. Lenders are constantly revising procuration fees, so the FSA may be making the assessment that some procuration fees might go down.
“Brokers are also going towards different models so while revenue may not actually go down, how the money is split might certainly change.
“We may well certainly see the procuration fee side of things get tweaked down but of course the brokers who will be impacted by that will look to alter their revenue streams.”
Figures from the Council of Mortgage Lenders numbers estimates gross mortgage lending of £138m in 2011 and the trade body predicted gross lending of £133bn in 2012 – a 3.8% drop.
This figure includes non-advised sales.
