"On the supply side we propose re-inventing Mortgage Indemnity Guarantees, with a focus on consumer benefit. This will help lenders to offer higher loan-to-value (LTV) mortgages, by making such loans less capital intensive for lenders. This in turn will 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.
"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. AMI proposes the abolition of Stamp Duty on residential property. With the restricted tax take because of reduced transaction volumes, there will never be a better time to take this revolutionary step. In the longer term AMI proposes providing targeted tax-free savings plans in order to help first-time buyers obtain the capital required for a lender deposit.
"The habit of savings needs to be redeveloped in the UK, and the provision of tax-free savings accounts for first-time buyers would be an important development in providing a younger generation with the incentives to save."
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