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Barclays have agreed to buy Standard Life Bank for £226 million in a deal which will bring the company more than 365,000 extra mortgage and savings customers in the UK.

Standard Life Bank, part of giant insurer Standard Life, was set up in 1998, aiming to attract relatively well off mortgage borrowers with its innovative product range, including flexible offset mortgages and long-term fixed rate mortgages.

In the 11 years it built up a mortgage book worth over £8.5bn, and also attracted savers to the tune of £5.5bn. The average loan to value (ltv) on a Standard Life Bank mortgage is 48%, slightly higher than Barclays average of 44%, and arrears are running at 0.68%, the lowest in the mortgage industry.

Our spokesperson for Standard Life group, said that the board members no longer believed that expanding the bank was consistent with the group’s long term financial objectives.

The acquisition was ideal for the Barclays group, increasing its mortgage book by more than 10 per cent and its deposit base by 6 per cent.

 We think that the deal is bad news for consumers: One of the dwindling number of brands still active in the mortgage market will disappear next year when the sale is concluded.