Castle Trust still waiting to hear from regulator on authorisation
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Castle Trust says it is still awaiting authorisation from the Financial Services Authority, after failing to launch on December 1, 2011.
Former FSA chairman Sir Callum McCarthy is a non-executive chairman of the lender, which revealed last year that subject to authorisation it would launch on December 1.
A Castle Trust spokesman says: “We are awaiting authorisation and will make a statement as soon as this position changes.”
The lender announced plans last June to offer partnership mortgages as well as investment and savings products based on house prices.
The partnership mortgages will offer borrowers under the age of 55 who have a 20% deposit another 20%, so that they can access a 60% LTV deal from another lender.
When the property is sold or the mortgage term ends, the borrower repays the 20% advance plus 40% of any increase in the property’s value, but if the house decreases in value Castle Trust will pay borrowers 20% of the loss.
Giving evidence to a Communities and Local Government Committee inquiry into the financing of new housing last week, Sean Oldfield, chief executive officer of Castle Trust, told MPs the volatility of home ownership is similar to that of stocks and shares and issuing equity could significantly reduce that risk.
Oldfield told the committee: “Most people don’t realise that the risk attached to a house is similar to that of the FTSE100 index.”
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