The minimum fees payable by mortgage brokers to the FSA is set to soar from £745 to £1000, and the consultation also includes proposals that the maximum increase in fees could be as much as 67%.

Despite the increased burden on mortgage brokers, the regulator claimed the introduction of a ‘fairer’ and ‘more transparent’ fee structure means that 60% of firms across different sectors will actually pay less.

The FSA said the increased cost of intensive supervision would be levied on firms whose size and impact require the most regulation. The 9.9% rise amounts to a new funding requirement of £454.7m.

Hector Sants, FSA chief executive, said: “The way that the FSA regulates has changed radically, both in approach and intensity over the last three years.

“We recognise that any increase in the industry’s costs is unwelcome at a time when margins are under pressure in some segments of the industry. However, the overall increases are necessary to deliver our new intensive supervisory approach. The new fee structure will ensure that the costs are fairly distributed and the increased investment is paid for by those firms who will be subject to increased scrutiny.”

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The paper also mentioned five unnamed trade associations who were against the new increased minimum fee, citing a lack of evidence of proportionally increasing costs.

Ray Boulger, senior technical manager of John Charcol, said: “The nature of this increase is totally unacceptable and could be the straw that breaks the camel’s back for smaller brokerages. It would be convenient for the FSA if all brokers were forced to join networks. The way that the FSA calculates its funding needs to be reassessed.”