The Association of Mortgage Intermediaries (AMI) has responded the Financial Conduct Authority’s (FCA) Business Plan and Annual Fees Consultation for 2016.

The FCA has stated that that it is holding its existing costs “flat”, but mortgage brokers and lenders will see their funding requirement rise as the second charge regime is integrated into the existing regime.

Most categories will see a 1.6% fall in costs, but mortgages have an increased funding requirement of 8.7% leading to a net increase of 7.1%.  The FCA is estimating a 10% increase in firms’ declared income so the amount a firm will pay will fall by 2.3% on a like-for-like basis.  However, AMI believes the mortgage industry keeps “paying for its success”.

£3.1m has been added to the costs of mortgage lenders and brokers to supervise the second charge regime.  The total bill for lenders and brokers now stands at £36.8m and AMI is seeking a “proper explanation” on what is costing this much.

Robert Sinclair, chief executive of AMI, said: “When the £200 annual fee for holding the Consumer Buy-to-Let permission is added plus the hidden FOS levy, together with £300 minimum annual fee for Consumer Credit – this makes the new bill for the smallest firms look increasingly expensive.  What was £1,000 only two years ago can now be a staggering £1,619 for the same business.”

Sinclair said that AMI will continue to challenge these unfair fee increases on behalf of member firms and ask for explanations as to what this money is being spent on. He also said the trade body will be responding “vigorously to this alleged consultation” and campaign for amendment to what he claims to be “unfair” FSCS funding arrangements that are not included in this consultation.

He added: “The mortgage industry has been hit with significant increases over previous years to pay for MMR and the implementation of MCD.  Now that these are complete there is no respite as firms continue to be dogged with higher fees.  The Business Plan makes no special play on mortgages but the costs continue to grow.  No dividend for the investment in new regulation and no explanation on how the 8% increase was calculated or justified to the FCA Board.”