Association of Mortgage Intermediaries director Robert Sinclair (pictured) says regulations cost mortgage brokers around £20,000 a year.
Speaking at the Mortgage Business Expo in London today, Sinclair said he was asked by the Treasury select committee to calculate the cost of mortgage regulation to brokers. He said he is unable to give a figure for the cost of new regulations, including the MMR, but added that current regulations cost £20,000 annually.
He said brokers pay £5,000 in regulatory fees annually, plus £9,000 in compliance costs. He said advisers lose an additional £6,000 pounds a year through lost office hours when they are conducting compliance work.
He said: “It means in order to trade you need to make £20,000 profit before you begin to generate income.”
Sinclair said the industry must accept increased regulation as a result of its past failings, but insisted that the total cost is disproportionate.
He said: “We have to accept the cost of having not policed ourselves very well, and we are all guilty of that. We relied on a regulator to do it for us.
“We are going to have to swallow that pain I regret but perhaps not to this degree because that cost is far too great. Proportionality is what regulation must have.”