Press
Mortgage Solutions 24th Oct 2005
Broker profits down post-regulation
The majority of mortgage brokers have experienced a decrease in profits since the onset of regulation, a survey by Alliance & Leicester (A&L) has revealed.
The survey found 58% of brokers interviewed had seen a decline in profits since Mortgage Day – an increase of 14% compared to those interviewed 100 days after regulation was introduced. To maintain pre-regulation profit levels, 51% of brokers said an increase in their turnover was required.
Job satisfaction was also highlighted as a casualty of regulation. The survey revealed 82% of appointed representatives believed the job had become more difficult, compared to 72% of those who were directly authorised. When questioned about key facts illustrations, 53% of brokers claimed they did not provide a real benefit to borrowers.
Mehrdad Yousefi, head of intermediary mortgages at A&L, said: "It is clear brokers still have some genuine frustrations and many are still experiencing problems."
James Carter, independent financial adviser at Virtue Financial, confirmed the findings: "Costs have eaten into profits. It has been twofold – the cost of regulation and the cost in terms of time spent dealing with new processes."