FCA scraps £200 consumer BTL fee

"For a small mortgage broker this means that their 2016/17 FCA fees will now be £1,384 (£1,084 + £300), which is unchanged from 2015/16, rather than the £1,584 (£1,084 + £300 + £200) fee originally proposed"

However mortgages will see an increased funding requirement of 8.7% leading to a net increase of 7.1%.

In its policy statement, the FCA said that one respondent challenged the 7.1% increase and two respondents did not support the application of the £200 consumer buy-to-let flat periodic fee to firms that also undertake regulated activities covered by the A.18 fee-block and the CC2 consumer credit fee-block.

In response, the FCA said that the increase is "solely related to the recovery of our estimated set-up costs resulting from this increase in our regulatory scope", as 2016/17 is the first year it has allocated MCD scope change set-up costs to fee-blocks.

However it has now modified the draft fee rate rules so that only CBTL firms that do not have permission to carry out any regulated activities will pay the CBTL flat fees. Firms will no longer pay separate CBTL fees in addition to the minimum fees they already pay.

In its statement, the FCA said: "The cost of our ongoing regulation of this increase in our scope has been absorbed within the same levels of allocation to A.2 and A.18 as in 2015/16. In our 2015/16 Business Plan we referenced implementing the MCD, but we did not recover any set-up costs in 2015/16. This is in line with our usual treatment of scope change set-up costs where we do not recover them until the year in which the change of scope comes into effect.

"For a small mortgage broker this means that their 2016/17 FCA fees will now be £1,384 (£1,084 + £300), which is unchanged from 2015/16, rather than the £1,584 (£1,084 + £300 + £200) fee originally proposed in CP16/9. CBTL periodic fees will still be paid by firms that are registered for CBTL activities and are not in any of the above fee-blocks. This is line with our overall policy that all firms should make some contribution to our costs."

Robert Sinclair, Chief Executive of AMI, commented: “We are grateful that the FCA has acknowledged some of the issues AMI raised around the minimum fee.  The FCA has gone some way to reducing the burden on small mortgage brokers by removing the additional CBTL fees. However the continued inclusion of the consumer credit fee is not insignificant. AMI fundamentally believes that consumer credit activities should not require mortgage intermediaries to hold a separate permission as they are already accountable under both the broader FCA principles and specific conduct rules.

"Although the majority of intermediaries will pay the minimum fee, there will be a significant bill for the largest firms who will bear all of the £1.2 million increase. We are disappointed that the FCA has failed to give a full justification for the amount being levied on the sector.”