What the papers say- 25th and 26th June 2011

There was widespread coverage in this weekend’s financial press of the new Government FirstBuy scheme, as well as another equity loan deal through Castle Trust. The Guardian looked at the FirstBuy deal, available to qualifying borrowers with a 5% deposit who will be eligible for an equity loan of up to 20% of the property value, with a 75% loan-to-value mortgage taken for the remainder. Experts stressed that First Time Buyer’s need to be fully aware of the implications for equity loans and should not simply consider it a cheap way to buy. The Financial Times reported on the Castle Trust Scheme, which also provides an equity loan of 20%, but this time borrowers must provide a 20% deposit and take a 60% mortgage. As pointed out in the Independent on Sunday, one of the unknowns of these new schemes is how they will be met by lenders. In theory borrowers should have access to better rates at 60% or 75% LTV, but experts suggested that lenders might offer a specific range of mortgages which may not be as sharply priced, as they have done with previous shared equity schemes. The Sunday Express reported on the strong demand for rental properties and the return of several major Buy-to-Let lenders, which are encouraging signs for experienced landlords looking to increase their portfolio. For those ‘reluctant landlords’ – those who have been unable to sell their properties and decide to rent them out – the advice is to tread carefully by ensuring they have permission to let by their existing lender, as well as being fully aware of the costs and obligations involved. Elsewhere the Sunday Telegraph looked at the increasing popularity of smaller building societies including Cambridge, Cumberland and Saffron, many of whom now offer market-leading rates.