Banking giant Barclays has agreed a deal worth about £2.3 billion to buy specialist lender Kensington Mortgage Company to broaden its lending offering.
Barclays said the acquisition will allow it to offer more mortgage options to the self-employed and people who have multiple or variable incomes.
The deal comes after the pandemic has led to an increase in the number of self-employed borrowers and those with complex incomes due to the impact of the Government’s furlough scheme and the wider effect on job volatility.
Barclays will also take ownership of a portfolio of mortgages offered by Kensington Mortgage Company, worth £1.2 billion, in efforts to lend to a greater variety of customers.
House prices have reached record highs in recent months as prospective buyers enter an over-heated market where demand has far outstripped supply.
Asking prices rose by 0.3% in June to reach an average of £368,614, according to recent Rightmove data.
But the property website said the housing market could begin to cool in the latter half of the year as the worsening cost of living crisis and interest rate rises begin to take effect on buyers’ ability to borrow.
Barclays UK boss said the deal will give borrowers access to a wider range of products more suited to them when trying to get on the property ladder.
Matt Hammerstein, chief executive of Barclays UK, said: “The transaction reinforces our commitment to the UK residential mortgage market and presents an exciting opportunity to broaden our product range and capabilities.
“KMC is a best-in-class specialist mortgage lender with an established track record in the UK market, strong broker and customer relationships and data analytics capabilities.
“KMC complements our existing UK mortgage business and broker relationships through the addition of a specialist prime mortgage originator and the utilisation of our strong UK funding base.”
The Maidenhead-based specialist lender has about 600 staff and offers buy-to-let residential mortgage options as well as owner-occupied lending.
The transaction is expected to complete towards the end of 2022 or early 2023.
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