The survey showed 43 per cent of respondents believed the introduction of retention fees across the industry could lead to less income for brokers. However, of the 204 intermediaries questioned, 29 per cent did not agree retention fees would have such an impact, while 28 per cent remained unsure of the outcome.
Mehrdad Yousefi, head of intermediary mortgages for A&L, believed the long-term affects of retention fees might not be positive. He said: “While brokers may see an initial increase in income from retention fees, in the longer term, if the majority of leading lenders embrace retention fees, we could see an overall reduction in remortgage activity, which will ultimately have an impact on fee income. However, mortgage intermediaries are entrepreneurs and they will no doubt find other ways to replace this loss of income, such as the fees paid for credit repair cases.”
However Roy New, a London-based sole broker, did not see how the introduction of retention fees would create a downturn in brokers’ income. He said: “It would give a steady stream of income, whereas an intermediary could lose the business to the lender. Retention fees would be good for the industry and the client. If it’s the best thing for a client to stay with the lender, then the majority of intermediaries will keep them with that lender and they would then get the retention fee. Though a couple of lenders have introduced them, I don’t think retention fees will ever be industry-wide if the lenders don’t have to do it. But it should be the norm.”
