AMI eagerly awaits the PBR and the Crosby Report on mortgage finance, which is due at the same time, and urges the Bank of England to allow more lenders access to its Special Liquidity Scheme (SLS).
AMI is also urging the Government to extend its mortgage rescue scheme, abolish the HIP system to help smooth the mortgage market, and provide more support for SMEs via a freezing of corporation tax, the introduction of a business support fund and the postponement of the business rate review. AMI is also calling on the Government to do more to help first time buyers by a wide review of stamp duty and the introduction of a tax free savings account to build up the capital needed for house deposits.
Andrew Strange, Policy Director, AMI, said: "We await the final Crosby Report with interest. Whilst many of the ideas raised in our ‘Solutions to the Credit Crunch' paper have been adopted, we would like to see improved access to the SLS for more lenders.
"Many of our members are SMEs. We believe it is imperative that support is offered to these firms. We would welcome a reduction in corporation tax and call for the business rate review to be postponed.
"We also believe HomeBuy Direct is an innovative scheme that can be of substantial benefit to the house building industry. But, we would like to see the Government open up the HomeBuy Direct scheme to include all properties, and also the remortgage market (the largest percentage of the mortgage market). We would also like to see the Government allocate more money to HomeBuy Direct than the £300 million already pledged.
"To help first time buyers build up capital and meet the demand for larger deposits we recommend the introduction of a tax free savings account run by National Savings and Investment's (NSI). We've seen the success of ISAs as a savings vehicle - why not introduce a similar scheme specifically aimed at the housing market.
"We welcomed the Government's proposals for a mortgage rescue scheme to help those borrowers who fall into arrears. We encourage lenders to offer a similar facility to housing associations who offer shared ownership schemes. This would operate on a reverse basis, offering clients with substantial equity in their property the facility to borrow back percentages of the equity in their home at times of market difficulty, with the option to buy back these proportions when the market and borrowers' circumstances improve."
Other calls from AMI in advance of the PBR include:
Wide review of Stamp Duty, including the option of applying tax to sales not purchases
VAT relief on building materials and labour to encourage house improvements and maintain value of housing stock
Establishment of a ‘business support fund' for smaller businesses to help with re-training and business investment
Abolishment of the HIP system to help smooth the mortgage market
