Ex FSA chair McCarthy plans new mortgage business

The scheme, backed by US private equity firm JC Flowers, would see savers frustrated by low interest rates bankroll first-time buyers struggling to get on the housing ladder, the Sunday Times reports. New venture Castle Trust would offer homebuyers a 20% deposit to buy a house in exchange for 40% of any profits made on the eventual sale. It would also share in any losses if house prices fall. The cash to put up the deposits would come from bonds sold to retail investors, whose returns would be dictated by the performance of the Halifax house price index. The complex business model ...