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FCA: UK mortgage brokers made £1.076bn in 2017

by: Mortgage Solutions
  • 07/06/2018
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FCA: UK mortgage brokers made £1.076bn in 2017
Home finance brokers reported revenue of £1.076bn from arranging regulated mortgages last year, which includes £61m from second charge loans.

In the Financial Conduct Authority’s (FCA) annual retail data bulletin, stripping out second charges, mortgage mediation revenue still showed a significant jump of 26% between 2016 and 2017 to £1.15bn.

The data from the Retail Mediation Activities Return suggested revenue for mortgage brokers has almost doubled over the past five years as a result of general market growth and the percentage of business transacted by brokers.

Growth in revenue from non-investment insurance mediation has been more modest – up 8% on 2016.


The profit slice

The report showed total reported earnings by mortgage brokers increased by 23% compared to 2016 to £1.2bn in 2017.

Insurance continues to play a large part in regulated revenues, particularly for larger firms. Total reported earnings by insurance intermediaries increased by 7% to £16.2bn year-on-year.

Including investment advisers, all UK retail advice firms paid over £300m in Professional Indemnity Insurance (PII) premiums in 2017.

According to the regulator, the average premium paid as a proportion of revenue earned from these three business activities was: 1% for mortgage brokers; 1.5% for insurance intermediaries; and 1.9% for financial advisers.

Smaller firms paid a higher proportion of their revenue as premium than larger firms.

Total reported earnings by financial advisers overall, including investment advisers, increased by 22% to £4.5bn in 2017 and aggregate pre-tax profits by 23% to £698m in 2017.

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