Five of the best paying buy-to-let lenders have ruled out cuts to their proc fees despite moves from the sector’s two largest lenders to cut the amount they pay brokers for business.
Last week, Money Marketing revealed The Mortgage Works, the UK’s second buy-to-let lender, plans to cut its buy-to-let proc fees following recent cuts by its biggest rival BM Solutions.
TMW currently pays a gross proc fee of 0.5 per cent to mortgage clubs and networks for buy-to-let business.
However, from early May the Nationwide Building Society subsidiary will reduce the proc fees it pays brokers to around the same level as BM Solutions, which pays 0.44 per cent to mortgage clubs and 0.48 per cent to networks.
On 1 March, BM Solutions changed its proc fee structure. While some accounts saw a small increase to their proc fees, the majority saw cuts of between three and five basis points.
When asked by Money Marketing’s sister title Mortgage Strategy whether or not they plan to follow BM Solutions and TMW’s lead, Abbey for Intermediaries, Accord Mortgages, Precise Mortgages, Platform and Paragon Mortgages/Mortgage Trust say they have no immediate plans to cut their proc fees.
Presently, Abbey and Accord pay 0.5 per cent for buy-to-let business, while Platform pays 0.53 per cent. Paragon/Mortgage Trust pay 0.5 per cent and 0.55 per cent to some key accounts, while Precise Mortgages pays 0.6 per cent for buy-to-let business.
An Abbey for Intermediaries spokeswoman says: “We are committed to supporting the market and we are not planning any changes to our proc fees at this time.”
An Accord Mortgages spokesman says: “We have no plans currently to review our buy to let procuration fees.”
A Platform spokesman says: “We have no immediate plans to alter our procuration fees, however we do continually review our position within the market, both in terms the products offered and the fees that we pay to intermediaries.”
Paragon Mortgages and Mortgage Trust managing director John Heron says: “We will keep market developments under review but we have certainly got no plans to cut proc fees at present.”
Precise Mortgages managing director Alan Cleary says: “We have no plans to cut proc fees at the moment. However, if large scale lenders keep cutting their proc fees, it puts us in a position where we will have to review things.”
The Buy to Let Business managing director Ying Tan says: “It is great that these lenders have ruled out proc fee cuts for the time being. But in buy-to-let, BM and TMW probably make up around 50 per cent of the market so it still means your income, if you do not charge a fee, will suffer.”