5 Mar

Darling proposes "kitemark" for mortgages

Darling proposes "kitemark" for mortgages

Chancellor of the exchequer Alistair Darling has unveiled plans to rank mortgages according to risk, it has been announced.

The least risky products, comprising only loans that meet tough standards of creditworthiness and quality thresholds, will be given a gold kitemark.

Mr Darling will publish his plans, which are designed to reopen the market for wholesale mortgage financing to be unveiled, in next week's Budget.

Banks have warned that this could create a two-tier system which could lead to some sectors of homebuyers paying more, including those with lower income, less creditworthiness or who wanted a higher loan-to-value mortgage.

British Bankers' Association (BBA) chief executive Angela Knight told the Financial Times that while there was "merit in the proposal" she did not want measures to lead to "stigmatising non-conforming mortgages".

Mr Darling will announce his Budget on March 12th and the BBA has also made calls for the government to rethink its stance on taxation.

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