The Government has been urged to resurrect mortgage indemnity guarantees (MIGs) in order to help re-energise the mortgage market. The Association of Mortgage Intermediaries (AMI) says the 2009 Budget represents the ideal opportunity to introduce measures that will help borrowers and intermediaries, and develop a stronger mortgage market. By reinventing MIGs with a focus on consumer benefit, the trade body says lenders would be able to offer higher loan-to-value mortgages by making loans less capital intensive. This in turn would allow lenders to increase their capacity to lend, and extend the availability of mortgages to a wider range of consumers such as first time buyers. The abolition of stamp duty on residential property and targeted tax free savings plans to help first time buyers save for a deposit are amongst the other proposals the AMI would like to see introduced. "With the average deposit paid by first time buyers in November 2008 at 18% of the property's value, it is clear there also needs to be significant demand-side support," said Robert Sinclair, AMI director.
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