Barclays has said it is buying specialist mortgage lender Kensington Mortgage to take a bigger share of the UK housing market.

The deal is worth around GBP2.3 billion, Barclays said. It requires UK regulatory approval and is expected to complete at the end of the fourth quarter or in first quarter of 2023.

“The acquisition will enable Barclays to broaden its product offering and capabilities in the UK mortgage market, extend the number of customers we can serve and grow mortgage originations to better utilise our strong UK funding base,” Barclays said.

London-based bank Barclays is buying Kensington Mortgage from companies controlled by funds managed by private equity firms Blackstone Tactical Opportunities Advisors and Sixth Street Partners,.

Kensington Mortgage had a pretax profit of GBP500,000 and income of GBP65.9 million in its financial year 2021, Barclays said. The lender had GBP66.7 million of gross assets as at March 31, 2021, Barclays said.

Kensington Mortgage’s mortgage portfolio stood at GBP1.2 billion as at May 31, split 70% for owner-occupied properties and 30% in buy-to-let residential mortgages.

“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,” said Matt Hammerstein, chief executive officer of Barclays Bank UK.

“The transaction should generate attractive returns for Barclays over the medium term as the KMC mortgage portfolio increases in size through the ongoing origination of new mortgages.