According to IMLA’s latest intermediary survey, 58% of first-time buyers were unable to get a mortgage through their broker in the final three months of 2008.
In addition, 56% of brokers surveyed said the reason they could not find a mortgage for a first-time buyer was that the most suitable product was not available via intermediaries.
Of the first-time buyers who were unable to obtain mortgage finance through their broker, eight out of ten opted to rent instead.
But IMLA’s research also revealed that intermediaries expected business volumes in all sectors to drop in 2009 with buy-to-let hit the hardest.
IMLA said it was concerned that the buy-to-let mortgage market was contracting rapidly. The private rented sector will not be able to grow and support increased demand for rented property if private investors cannot get mortgage finance.
Williams said: "If we are to see a genuine contraction in home ownership in the UK, the Government must put its money where its mouth is.
"They must promote non-banks to the bank bail-out premiership. Currently, intermediary lenders who traditionally serve the buy-to-let market are being frozen out by the Government – without support helping them to free up cash to lend, the buy-to-let market will suffer further retrenchment.
"This is a vital component of the UK housing market and the Government is currently ignoring its need."
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