How to Start a Mortgage Brokerage in the UK

Mortgage broking is a lucrative, relationship-driven business with strong demand. The UK mortgage market is complex, and borrowers increasingly rely on professional advice. If you have the qualifications and regulatory approvals, running your own brokerage offers excellent earning potential.

FCA Authorisation

You must be FCA authorised to give mortgage advice. Two routes:

1. Directly authorised (DA) — apply to the FCA yourself. Full regulatory responsibility and compliance obligations. Application takes 6–12 months and costs vary.
2. Appointed representative (AR) — operate under a network's FCA authorisation (e.g., Openwork, Quilter, Sesame). The network handles compliance, and you pay fees or revenue share. This is the most common route for new brokers.

Qualifications

Minimum requirements:

• CeMAP (Certificate in Mortgage Advice and Practice) — the standard qualification, delivered by the London Institute of Banking & Finance
• CeRER — if you advise on equity release
• CII Certificate in Mortgage Advice — an alternative to CeMAP
• 35 hours CPD per year — mandatory under FCA rules

Sole Trader or Limited Company?

Most mortgage brokers operate through a limited company for liability protection and tax efficiency. However, sole trader status works fine, especially when operating as an appointed representative.

Registering with HMRC

Register for Corporation Tax (limited company) or Self Assessment (sole trader) as appropriate. VAT: mortgage broking services are exempt from VAT. You cannot charge VAT or reclaim it on expenses.

Insurance

• Professional indemnity — mandatory under FCA rules. Costs £1,000–£5,000+ per year.
• Public liability — if clients visit your office
• Cyber insurance — essential given the sensitive financial data you handle
• Directors' and officers' — if operating as a limited company

Claimable Expenses

• Network fees — if an appointed representative
• FCA fees and levies — if directly authorised
• Professional subscriptions — CII, LIBF
• CPD and training
• Sourcing systems — mortgage sourcing software (Twenty7Tec, Trigold)
• CRM software — client management systems
• Home office or office rent
• Marketing — website, Google Ads, social media, referral incentives
• Travel — to client meetings, at 45p per mile
• Phone and broadband
• Insurance premiums
• Accountancy fees
• Compliance costs — file checking, supervision

Accounted handles your expense tracking and categorisation automatically.

Revenue Model

Mortgage brokers earn through:

• Procuration fees — paid by lenders on completion. Typically 0.3–0.4% of the mortgage amount.
• Broker fees — charged to the client, typically £500–£1,000 (sometimes waived)
• Trail commission — ongoing commission on some mortgage products
• Protection commissions — life insurance, income protection, and critical illness products sold alongside the mortgage

A busy broker completing 5–10 mortgages per month can earn significantly. The combination of procuration fees, broker fees, and protection commissions makes this a strong income model.

Industry-Specific Tax Considerations

VAT Exemption

Mortgage advice is VAT-exempt. Irrecoverable VAT on your office, software, and equipment is a genuine business cost.

Commission Timing

Procuration fees are typically paid on mortgage completion, which may be several months after your initial advice. This creates cash flow gaps — plan accordingly.

FSCS Levy

The Financial Services Compensation Scheme levy is a deductible business expense. Levies vary year to year.

Building Your Brokerage

• Estate agent partnerships — the primary referral source for many brokers
• Accountant and solicitor referrals — professional connections
• Repeat clients and referrals — remortgage reminders maintain relationships
• Social media — LinkedIn for professional networking, Facebook for local visibility
• Google presence — SEO and reviews

Bookkeeping Tips

• Track commission income by lender and product
• Monitor pipeline — applications in progress vs completions
• Separate business and personal finances
• Budget for irregular income — commission timing can be unpredictable
• Record all FCA and network fees

Accounted connects to your bank and categorises transactions with AI. Designed for UK financial professionals.

Key Deadlines

• 31 January — Self Assessment or Corporation Tax return (12 months after year end)
• Annually — FCA renewal, PII renewal, CPD completion

Getting Started

Mortgage broking offers strong, recurring income with the right qualifications and network. Get authorised, build your referral relationships, and keep your finances in order.

Ready to manage your brokerage finances? Sign up for Accounted and let Penny handle the day-to-day bookkeeping.