A story on the Mortgage Solutions website caught our eye over the weekend.
Apparently, the revenue derived by broker firms and advisers amounted to £1.58 billion in 2022. This was up 12% over the previous year.
That’s quite a chunk of money being extracted – sorry, earned – out of the pockets of borrowers.
Data from the Financial Conduct Authority (FCA) showed that this was spread across 4,277 firms, while the reported number of mortgage broker posts was 36,441.
Commission was the main source of revenue.
Mortgage brokers earned £1.26bn in commission in total from all the business they conducted, with £868m of that coming from mortgage activity.
Read the full article here for more eye-watering statistics.
1.58 billion sounds like a lot of money.
But, if we assume that (on average) 75% of that total figure goes to the actual broker (i.e. after running costs and etcetera), then the typical mortgage broker is on about £32,500 per annum.
That’s just under the average full-time wage in the UK.
Hmmm!
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‘ That’s quite a chunk of money being extracted – sorry, earned – out of the pockets of borrowers.’
Really, Eye? Statements like these are horribly misinformed. The mortgages recommended to clients by brokers are no more expensive than those offered directly by banks, on average. In fact, seeing as the banks don’t have to pay a broker’s NIC or pension contributions, then the basic 0.3% or 0.4% commission (procuration fee) paid to brokers must save banks millions of pounds per year. You have only to look at how many banks have reduced their in-house mortgage adviser numbers to see that your reporter is putting cheap shots above facts. If it was cheaper for them to hire their own people, then they would do it!
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