According to the latest Mortgage Intermediary Distribution report from business information firm Datamonitor, the number of respondents earning less rose from 60% to 70% in 2010.
Issues over funding have been cited as one of the main reasons for providers turning away from the intermediary channel.
The firm also said that there was no incentive for lenders to maintain procuration fees at the levels seen in the years leading up to the banking crisis, suggesting fees are likely to remain at the same level for the next 12 months.
The report revealed that the proportion of brokers that believe they will do more lending in the coming year has fallen. Just over four in ten (42%) believe that intermediary lending will grow in the next twelve months and around a fifth (22%) said it will continue to fall.
Industry professionals say brokers are also increasingly charging upfront fees for services offered, rather than relying solely on commission-based income.
Between 2009 and 2010 the number of brokers that gained over 80% of their income from commission fell from 51% to 44%, the report showed.
On average, the proportion of intermediaries’ incomes that came from commission rather than fees fell from 70% to 68%.
Dominic Lipnicki, director of mortgage consultancy firm Your Mortgage Decisions, said: “Just to live on proc fees alone is almost impossible. I think brokers are beginning to understand that if they don’t start charging for their advice then they won’t be in business for very long.
“A fee-charging model will enable them to advise on the whole of the mortgage market and recommend direct-only deals that do not pay them commission. This should help to attract customers, who can be reassured that they are being given the best possible advice and guidance,” he explained.
TenetLime has revealed its interest in looking to move its members towards a fee-charging model.
Gemma Harle, managing director of the network said: “Not only are procuration fees not sufficient to provide an adequate income for most brokers, but also such a move will help to boost their professional reputations.
“If a service is provided free of charge then there is a tendency for consumers to undervalue it. Charging fees will help to increase recognition of the work undertaken by brokers.”
