AMI - more action required to support mortgage market

The Association of Mortgage Intermediaries (AMI) has today published its latest Quarterly Economic Bulletin that sets out its view of the economy, including the mortgage and housing markets.

The main findings of the new report include:

The prediction that house prices will continue to fall but the pace of decline will slow

The main restriction on the housing market remains the lack of available finance for consumers. This is particularly restricting first-time buyer access to the market

The lack of funding has also decimated the sub-prime market, which is unlikely to recover in a serious way

Gross lending for 2009 of £145bn still looks achievable - with slightly more than half that figure being distributed via intermediaries, a slight increase on previous estimates

Robert Sinclair, Director, AMI, said: "There are some positive indicators, which will conflict with other negative news. This may indicate we are now reaching the bottom of the market. For example, buyer interest is on the increase. However, mortgage availability remains the key constraint on the market and we fear we are not over the worst.

"Those with good deposits or plenty of equity can access very competitive rates, but those who can't are unable to take advantage of lower house prices. First-time buyers are the largest group affected. Prices have fallen so much they are offering first-time buyers a terrific opportunity to get on the housing ladder - if they can raise the money.

"We need to see further action from the Government to inject much needed finance into the mortgage market if we are to take advantage of the upturn in consumer interest and more positive outlook. We need either an extension of the Stamp Duty holiday or its abolition, together with an expansion of the Special Liquidity Scheme to more lenders."