Barclays Bank is all set to buy Standard Life as the media reported earlier today. That’s good news for some, but what does it mean for the mortgages market?

Only today, Standard Life announced the decision to sell Standard Life Bank for a sum of £226 million to Barclays Bank.

According to Ray Boulger of John Charcol, Standard Life Bank has been a good mortgage lender for years and he believes if Barclays removes the brand and changes its ethics when the sale completes in 2010 then this is not good news.

Mr Bougler said Standard Life was one of only a few mortgage lenders still offering fixed rates for five years and more as well as buy to let loans and it has a good loan book, and he commented:

“Today’s announcement isn’t great news for consumers, as it means that one of the dwindling number of brands still active in the mortgage market may well disappear next year when the sale is concluded.

“Standard Life Bank is one of the few lenders still offering mortgages with fixed rates for longer than 5 years and is also one of a relatively small number of lenders still in the Buy-to-Let market.”

Standard Life has customer deposits worth £5.5 billion and mortgages of £8.8 billion. Subject to regulatory approval and a few other decisions, the sale is expected in January of next year. expected to complete in January 2010.

Mr Boulger added: “It is still a young bank, having been launched only 11 years ago, but has been innovative, with one of its initial products being a 25 year capped rate mortgage. However, its rates have been uncompetitive for some time, which is an indication it currently has little appetite to lend.

“With outstanding mortgage balances of £8.8bn Standard Life Bank only has about 0.7 per cent of total UK residential mortgage balances but its average indexed loan-to-value (LTV) of 48 per cent indicates a good quality book.

“Even though Standard Life Bank offered mortgages to 100 per cent LTV it only offered these to a fairly limited range of professionals and so I would expect even its high LTV book to be of good quality.”

We certainly hope this won’t be a blow to the mortgages market, but what Barclays intends to do with the Standard Life Bank brand remains to be seen.

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