AMI made the claim in its latest Quarterly Economic Bulletin which outlines the association’s views on the UK economy, housing and mortgage markets.
AMI said that whilst the ‘squeezed middle’ of the mortgage market are unable to move up the property ladder the market will remain congested.
The review also shows that first-time buyers reached a five year high and that house prices fell by 1.5%.
Robert Sinclair, chief executive of AMI, said: “Whilst there has been much concern over the plight of the first-time-buyer and various steps have been taken to address this, we are concerned over the ‘squeezed middle’.
“These are owners who are looking to move for the first or second time but whose equity has shrunk, or with tighter criteria might not even qualify for the mortgage they have today.
“Unless they can trade up, the market remains congested and subdued.”