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BUDGET 2009 NEWS: AMI and CML welcome ABSG scheme

The asset-backed securities guarantee scheme announced in today’s Budget has been welcomed by the Association of Mortgage Intermediaries and Council of Mortgage Lenders.

AMI director Robert Sinclair says the scheme, designed to guarantee mortgage-backed securities to boost lending, will help inject much needed liquidity into the mortgage market.

He says: “This is a welcome albeit long overdue measure, which we first suggested over a year ago. It should mean the market is better placed to respond to the increased buyer interest we are starting to see.

“The Government must now monitor this investment to see if it is sufficient, or if it needs to be extended beyond the October 2009 end date.”

CML director general Michael Coogan says described the scheme as the most important element of this Budget for the mortgage market.

He says: “This potentially offers an opportunity to restart the capital market funding for mortgages that will be a crucial factor in delivering an adequate supply of mortgage credit.”

Sinclair also says a bolder step by the Chancellor Alistair Darling would have been to abolish stamp duty, not extend it, and suggests that a re-invention of mortgage indemnity guarantees to encourage lenders to offer loan to values above 70 per cent.

However, Coogan says: “Although today’s Budget measures will have little short-term impact on the housing and mortgage markets, they do at least remove some of the uncertainties associated with the potential impact of withdrawing stamp duty and income support for mortgage interest concessions too early, and provide some relief to support the new-build housing market.”

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