AMI calls for a budget for mortgages

The Association of Mortgage Intermediaries (AMI) has called on the Chancellor to introduce a budget for the mortgage market. AMI has called for greater support for first time buyers, extra liquidity in the market and improved income support for those struggling with repayments.

Richard Farr, Director of AMI, said: "The mortgage market is going through a turbulent period, largely due to the effects of the liquidity crunch. Lenders have said on the record that they are looking to improve their margins rather than increase market share, so while bank rates have been falling, last week actually saw an increase in the variable rates being charged by some lenders.

"The danger is that fewer people will get mortgages, and those who do will have to pay a great deal more for them. Partly as a result of the liquidity crisis lenders are restricting some of their innovative products that have allowed some first time buyers, the credit impaired and buy to let investors, into the market. This can be seen by Northern Rock's decision to invite many of its existing borrowers to look elsewhere. We believe the government should provide a boost to the market and support to consumers who will face a difficult period with tens of thousands of people coming off fixed rate loans in the next year."

Capital Gains Tax

"AMI continues to have concerns over the proposed CGT changes. The proposed reforms are likely to encourage short-term buy-to-let landlords over long-term investors, which is not good for consumers or the market overall."

Stamp Duty

"Thresholds for stamp duty have not risen in line with property prices. We would like to see this addressed in the budget. Given the difficulties faced by some first-time-buyers we would also welcome discussion on the feasibility of exemptions from Stamp Duty for first time buyers.

"Stimulation of the first time buyer market would provide a boost to the entire housing chain. The economy can be seriously affected by a slow down in housing transactions with knock on effects being felt by developers, estate agents, financial advisers, surveyors and retailers.

Long term fixed rates

"We are yet to be convinced that long term fixed rates are suitable or desired by the majority of UK mortgagors. We hope to see further acknowledgement of the competitive, diverse and flexible mortgage market already existing in the UK.

Market Conditions

"Given the liquidity problems being experienced by the markets, we would welcome discussions on how to address the problems. We need to seek out alternative sources of funding for the UK mortgage market. That is why we have been in discussion with the Treasury, the Bank of England, the main political parties and the industry to help bring new lenders into the market from outside the UK.

"The Chancellor's plans for a gold standard for mortgage-backed securities are one option. We hope this will stimulate trading in the securitized market allowing non balance sheet lenders back in to the market facilitating enhanced competition and better choice for borrowers. However, we are concerned that the kitemark is not just restricted to prime mortgages and should include all types of asset that have a better than average performance, such as buy to let lending."

Income Support Mortgage Interest

"We would welcome consultation on the issue of ISMI. At present there is a notable disparity in benefits for those in rented accommodation and property owners. We believe there is scope to revise provisions for the lowest-income families and provide better support. As an industry we must do all we can to support those who are having difficulties with repayments. But the government can also play its part by providing improved access to this mortgage safety net."