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Views on increased proc fees

Journalist: Jake Carter, Mortgage Introducer

ended 09. October 2023

Nottingham Building Society has recently announced it will offer increased procuration fees.

Is there more to be done regarding proc fees? 

Will this move encourage other lenders to follow suit?

What do you believe is fair value for brokers in terms of proc fees?

8 responses from the Newspage community

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Michelle Lawson
Director at Lawson Financial
This is great news for brokers and consumers. Family Building Society have also announced the same. For us to ensure our customers get the best financial outcome the research is the same whether we recommend a change of lender or a change of product with their current lender. The work involved is also increasing with the frequent rate changes which we effectively do free of charge. Waiting and welcome for more to follow!
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David Stirling
Independent Financial Advisor at Mint Wealth
Remuneration by procuration fees from lenders hasn't increased in decades, which was understandable in the era of sub-2% lending - giving away up to 0.4% as a proc fee was a large proportion. With current rates being so high there must surely be an argument for an increase? Some banks aggressively target introduced clients with "product density" - life insurance, bank accounts, buildings insurance, etc - so really do make massive profits from our recommendations!
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
As lenders fight for market share and mortgage retention, they have already started to compete based on the product rates, some will then look to proc fees to brokers to see if that can win more business. I believe one element that should change is product transfer proc fees should be the same as a new business, like with Halifax. Ultimately it is still re-securing business for the lender and there is still plenty of work involved to justify the advice of staying put. Otherwise, I think proc fees are at a fair level currently, but these are higher through a network than directly authorised firms receive.
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Samuel Gee
Director at Manning Gee Investments Limited
Procuration fees are a lender's way of getting us to do all the work around documentation and packaging a case, but they don't reflect the risk of the advice process taken on by firms. An increased proc fee is a first step, but the system should be overhauled to recognise the work and risk undertaken by firms. I am glad Nottingham Building Society is leading the way with this.
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Graham Cox
Director at Bridging Hub
Low proc fees have been a bugbear for years. It's understandable to a degree, as loan sizes compensated when mortgage rates were at all-time lows. But with house prices falling and mortgage rates back to 'normal', albeit painful levels, lending just got a whole lot more profitable for the banks. Only right they should pass some of that on when loan amounts are shrinking.
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Gareth Davies
Director at South Coast Mortgage Services
I'd love to see a review of proc fees across the board. Many lenders haven't budged on what they pay brokers for well over a decade if not two. Yes, average loan sizes have increased but so has regulation and the amount of work that goes into every submission. I wouldn't be against proc fees being paid across say, two years, to help brokers build real value to their businesses.
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James Bull
Mortgage Broker at JB Mortgages
In general i feel that lender proc fees are fair. The main thing lenders need to work on is proc fees for product transfers, these are embarassingly low for some lenders. As a broker it is almost as much work to do a PT as for a remortgage so I feel lenders should pay the same as a new mortgage.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
by rights I think procuration fees should be increasing now that rates are higher than they have been and lenders margins are up, yet brokers are doing increasingly more work to get cases over the line than ever before.