AFB scraps elected board
Instead, the AFB is inviting member firms to send a representative “to debate issues and agree the policy stance to be adopted by the association”.
AFB income, reported in the AIFA annual results, is now just a fifth of its market peak while the number of member firms doing purely second charge advice has dropped from 460 to 30 in the past four years.
Robert Sinclair, director of the AFB, said: “The reduction in number of lenders has been matched by an even larger fall in the number of brokers. This has severely impacted AFB income which is now less than 20% of the market peak.
“That is a fairly savage downturn by anybody’s standards.”
Second charge lending currently falls under the Consumer Credit Act but is due to move under Financial Services Authority jurisdiction at some point.
There is also potential for second charge lending to be captured by the European mortgage directive, which Sinclair said contributed to “uncertainty” for firms trying to plan.
He added: “The pressure on lenders has also been raised to ensure that they know the brokers they use and that the brokers comply with both the principles and letter of regulation.
“This adds significant cost to an already stressed and stretched industry.”