Mortgage brokers could see their professional indemnity insurance premiums quadruple in the new year as a result of uncertainty in market conditions.

Industry sources suggest that mortgage brokers, who currently can get PI cover for around £200 a year, will have to pay as much as £800 next year.

One source says some mortgage brokers have been declined cover and one client was charged over 30 times the premium paid previously.

Law firm Browne Jacobson considers that the sub-prime and impaired-credit markets will have the greatest number of claims next year.

Collegiate underwriting director Richard Turnbull says with the recent FSA crackdown on the mortgage market and an expected fall in property prices, there is a strong possibility that PI rates for mortgage brokers will increase significantly.

He says: "There is great uncertainty over what is going to happen and we are already seeing massive variations in prices quoted."

Even if there is a substantial increase, mortgage brokers will still have lower rates than IFAs who pay an average of around £2,000 a year. PI brokers suggest that IFA rates will remain steady.

PYV chief executive Neil Pointon says: "Even if PI rates do rise for mortgage brokers, the cover would still be extremely good value for money. We can still deliver, even in these difficult market conditions."

The Mortgage Practitioner sole practitioner Danny Lovey says: "It has not been proven there will be more claims."