Alan Cleary, managing director of Precise Mortgages, claims pressure on lenders to generate as much business as possible through their branches could see proc fees disappear from the market.
A mass market move away from interest-only, dual pricing intensifying and proc fees already being cut are the first signs.
He said: “The next move will probably be withdrawal of proc fees for certain types of products which will evolve into at least one brave lender abolishing proc fees altogether.”
Cleary reckons the current market is exactly the way it was in the early 1990s before Halifax introduced proc fees for remortgage business and brokers should choose who they support carefully.
But Robert Sinclair, director of the Association of Mortgage Intermediaries, said: “I don’t think we’re at a turning point yet though I could always be wrong and people are always reviewing their pricing.”
A spokeswoman for Lloyds Banking Group said: “Intermediaries are very important to us and paying competitive proc fees is a key part of our proposition. We have no plans to remove them.”
And David Finlay, intermediary director at Barclays, said: “Lenders need to think carefully about biting the hand that feeds them. The market will return and brokers in my view will play a significant part.”
Ian Andrew, managing director of group intermediary sales at Nationwide, said recent proc fee changes at the mutual were simply a commercial decision.
He said: “There is nothing more it than that and we would urge brokers to ignore some of the scaremongering being associated with these minor changes and to concentrate on the many positive things Nationwide is doing to support the intermediary community.”
Charles Haresnape, managing director of residential mortgages at Aldermore, said lenders always fall back on the broker market to achieve volume.
He added: “The focus via the Mortgage Market Review is that full advice is vital in nearly all circumstances so I see a good future for mortgage brokers.”
Brokers meanwhile took Cleary’s prediction with a pinch of salt.
David Copland, chief executive at Pink Homeloans, said: "I think this is a premature reaction to current trading conditions. Whilst like 2008 there is another adjustment in the commercial terms between lenders and brokers I would not like to predict that this will end up some proc fees being abolished."
Andrew Montlake, communications director at Coreco, said: “For many lenders proc fees are more than affordable and a more cost effective way of obtaining quality distribution than through expensive branch networks.
“Some brokers need to wake up and smell the coffee with more emphasis put on professionalism, service, fee charging and complementary advice.”
David Hollingworth, associate director at London & Country, said: “Lenders will need a thriving intermediary sector to remain in place when appetite increases. Throttling the broker market now by withdrawing fees would contradict the stated intent of most lenders to continue to support the intermediary market.”
And Matthew Fleming-Duffy, mortgage broker at Dorset-based Wessex Investment Management, said: “Best-buy tables will never replace the market knowledge, sourcing and administrative expertise of experienced brokers. To insist that all brokers should charge fees would only restrict the availability of impartial advice to the mass market.”
