The proposed fee increases from the FCA should shock and anger firms. They should also worry consumers. These costs have to be passed on.
With inflation running at 0 per cent and wages increasing at less than 2 per cent, it takes a special type of organisation to propose increasing its costs by 8.5 per cent. The combined mortgage lender and broker fees blocks are proposed to total £34.3m, up from £31.7m last year and from £24.0m in 2010. This is a huge amount of money to regulate the mortgage industry.
Many smaller firms will also need to hold a simple consumer credit licence to cover isolated activities, which will cost £100 but sits outside the minimum fee allowance. In addition, a new mortgage permission for consumer buy-to-let has been created costing £250 for the FCA plus £100 for the FOS, which will also sit outside the minimum fee structure. So the smallest firms could see their invoice grow by £534 from its modest £1000. This cannot be acceptable at a time when all are being asked to accept continued austerity.
It makes one wonder what levels of challenge are coming from the Treasury and FCA board. What is clear is there is no real challenge happening on costs, value and efficiency. However, when we look at other regulators we see a very different story: it is hard to believe the combined costs of the Civil Aviation Authority, Ofcom, Ofgem, Ofwat, the Office of the Rail Regulator and the Food Standards Agency are less than the FCA alone. Our industry needs to make a stand against these plans.
Robert Sinclair is chief executive at the Associate of Mortgage Intermediaries