A 'practical solution' is required to boost mortgage lending and encourage both borrowers and lenders into the market, the Association of Mortgage Intermediaries has said.
In its latest Quarterly Economic Bulletin looking at the economy, housing and mortgage markets, the AMI has suggested that more needs to be done to encourage lenders to provide higher levels of mortgage lending, while making buyers feel confident that if they find the right house, they can find the necessary finance.
The AMI has aired these suggestions as a reaction to figures which show that gross mortgage lending for the year might not meet its previous prediction of an estimated £150billion, in the face of the banking sector facing short-term liquidity issues.
The AMI is also concerned that the Special Liquidity Scheme will be withdrawn from April 2011, and the effect that this will have on lending.
Commenting on the report, Robert Sinclair, director of the AMI, said: "All the main Banks face challenges to their ability to fund mortgage lending as the Special Liquidity Scheme reaches its repayment phase early next year.
"A practical solution is required that allows a sustainable mortgage market, so that consumers can look for a property safe in the knowledge that funds might be available."
He added: "Brokers continue to exert significant influence over the market as customers continue to use them to look across the market. This ensures they have the best chance of getting a mortgage that will allow them to complete on the property they want."
Mr Sinclair said that it is easier to feel some sense of certainty about interest rates, tax and unemployment following the emergency budget, and he expects average house prices to remain largely stable for the rest of the year.
© Fair Investment Company Ltd