In addition the report suggests that:
* The banking sector faces short-term liquidity issues, needing £800billion for refinancing in the next 18 months;
* Gross mortgage lending for 2010 might not meet our previous estimation of £150billion;
* The housing market will continue to see significant regional variation South east outperforming north, which will be hit by public sector job losses.
AMI Director Robert Sinclair 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.
"With the Emergency Budget behind us we have more certainty about interest rates, taxation plans and likely levels of unemployment as the public finances are brought under control. We expect house prices to have a large degree of regional variation, with prices overall reaching the year end much the same as now.
"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."
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