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Mortgage firms win battle over consumer buy-to-let fees

  • 30/06/2016
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Mortgage firms win battle over consumer buy-to-let fees
Mortgage firms can claim a small victory in the fight against rising fees as the Financial Conduct Authority (FCA) backed down on its charge of £200 per year for consumer buy-to-let business.

In its fee policy and feedback statement, published today, the regulator has announced the proposed fee will not be introduced.

Two respondents to the FCA’s consultation on fees did not agree that firms which undertook regulated activities covered by the A.18 fee-block and the CC2 consumer credit fee-block, should have to pay an additional £200 to write consumer buy-to-let business.

The A.18 fee block covers home finance providers, advisers and arrangers while the CC2 consumer credit fee block covers consumer credit firms with full permissions.

In its feedback statement, the FCA said it agreed with the respondents and has modified the draft fee rate rules which it consulted on so that only consumer buy-to-let firms which do not have permission to carry out other regulated activities will have to pay the annual flat fee.

Firms in the A.2 (home finance providers and adminstrators), or A.18 fee-blocks, or that undertake consumer credit activities in the CC2 fee-block will not pay separate consumer buy-to-let  fees in addition to the minimum fees they already pay through these fee-blocks.

The reduction means that for smaller brokers, their 2016/17 FCA fees will now be £1,384, which is the minimum regulatory levy, plus the £300 charge for consumer credit activity, recently introduced because of the significant changes to second charge regulation due to the Mortgage Credit Directive.

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