HBOS to be taken over by Lloyds TSB - buy to let mortgages

18 September 2008

Lloyds TSB has announced that it will take over Halifax Bank of Scotland (HBOS) in a move that could be significant for those with buy to let mortgages.

It agreed to come to the group's rescue by buying it out for £12.2 billion.

The government has intervened to override competition laws that would normally block such a deal in order to prevent one company controlling the majority of the market.

However, it was felt that national financial security was more important in this case and the agreement was given the go-ahead.

It was met with a mixed reaction from the industry. Head of UK equities at Schroders Richard Buxton told the telegraph: "The ramifications are horrific. Why would anyone provide equity capital to listed companies if the government can ride roughshod over them?"

Yet regulator the Financial Services Authority welcomed the move, stating that it could enhance stability for the markets and improve confidence among investors and customers.