View more on these topics

Brokers fear further cuts in bank proc fees

Brokers are concerned about the changes some major high-street lenders have made to their procuration fees and fear further reductions could follow.

Barclays will stop paying an enhanced procuration fee on offset mortgages, aligning them with its other residential mortgages, and is scrapping its proc fees on further advance applications from January next year.

Barclays argues that having one proc fee for all residential mortgage applications will make it easier and clearer for brokers to understand.

The Mortgage Works has cut the enhanced procuration fee it pays to certain distributors, in a move that will come into effect in the new year, although the lender would not disclose how much the fees would fall.

Lloyds Banking Group is also adjusting adjust its proc fees from January 1 for applications made to Halifax and BM. Fees will fall for some national accounts but increase for others.

MoneyQuest managing director Simon Jackson says: “I think this has been coming for a while. Proc fees have been under pressure but, as an intermediary, you never want to see them go down.

“If lenders are testing the water for a ongoing reduction in proc fees, that would be bad news for brokers.”

Chadney Bulgin mortgage partner Jonathan Clarke says: “There are not many people in the offset market at the moment, so if there are not many providers, the lenders have got us by the short and curlies. It is not good news.

“Easily a third of my business is off-set and the bulk of that goes through Barclays, so this announcement affects me quite badly.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment