Chief executive Robert Sinclair said while there was much concern over the plight of the first-time buyer, his organisation was concerned about owners looking to move for the second or third time.
He said: “Part of the congestion of the market for those first-time buyers that might want to go into a new build is the lack of first-time buyer properties available through an estate agent.
“A lot of this is because people are sitting on these properties do not feel they can trade up.”
Funding for Lending had a role in reducing this congestion but would benefit from more specific targets, he added.
“Brokers are having to sit and wait, because what we need is higher loan-to-value products and a loosening of criteria from lenders.
“But we also need the government not just to focus on first-time buyers.”
Examples of ‘squeezed middle’ buyers might be homeowners who first took out a self-certified or interest-only mortgage, Sinclair suggested.
“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.”
Sinclair’s comments come a week after property developer Larry Lipman argued first-time buyers’ problems were overstated.