Lenders and brokers have rejected the FSA claim that less than half of all mortgages are arranged through intermediaries, saying it is a minimum of 50 per cent of all loans.
In CP146, The FSA's App-roach to Regulating Mortgage Sales, the regulator states that while requiring independent mortgage intermediaries to advise on the whole of the market will protect some consumers, it “is likely to affect less than half of all transactions because a significant proportion of mortgages are arranged via different distribution channels.”
But the industry maintains that the percentage of loans through intermediaries is about 60 per cent and in some business areas, such as sub-prime mortgages, it accounts for as much as 95 per cent.
Lenders say the fact that the regulator appears to be using such assumptions in deciding how to define independent mortgage intermediaries is worrying.
The Halifax, the biggest lender with an extensive branch system, says its lending is divided evenly between branches and brokers.
Future Mortgages communications manager Richard Hurst says: “Well over 95 per cent of the business we do is arranged through intermediaries. That is the foundation of our business.”
Yorkshire Building Society corporate affairs manager David Holmes says: “The lowest proportion that we have ever had is 50 per cent through intermediaries. Generally speaking, the ratio is around 60 per cent. I find it staggering that is what they are saying.”
FSA spokesman David Cliffe says: “It is just an approximation. I do not think we are using this statement as a lynchpin of our thinking. It is a consultation paper and the industry can make the point and correct us if we are wrong.”