Monday, January 12, 2009
Darling to guarantee £100bn of new mortgages
ALISTAIR Darling is set to back a £100bn gamble with taxpayers' cash in a desperate bid to kick-start the struggling mortgage market. The Chancellor's plan involves effectively underwriting the majority of new mortgages in the UK to encourage big investors to give badly needed money to lending banks. The proposed scheme means the UK Government would guarantee mortgage bonds, where banks parcel up individual home loans and sell them to investment firms. The new measures, coming on top of a £500bn scheme to guarantee banks' borrowing and the £12bn cut in VAT announced in October, will raise further fears over the extent of the Government's spending.