L&G to Sell UK Builder to Sixth Street in £1.35 Billion Deal

Legal & General to Sell Housing Business

Legal & General Group has agreed to sell its UK housebuilding business to US private equity firm Sixth Street in a deal worth £1.35 billion.

Transaction Details

The transaction is expected to close in the second half of 2023, subject to regulatory approvals. Sixth Street will acquire L&G's entire UK residential development portfolio, including 14,000 plots with planning consent and a further 11,000 plots in the planning process.

Strategic Rationale for L&G

L&G said the sale is part of its strategy to focus on its core businesses of insurance, retirement, and investment management. The company has been gradually reducing its exposure to non-core assets, including its housebuilding business.

Benefits for Sixth Street

For Sixth Street, the acquisition will provide a significant foothold in the UK housing market. The firm is already a major investor in the US housing market and has been looking to expand its operations in Europe.

Market Implications

The sale of L&G's housebuilding business is expected to have a limited impact on the UK housing market. L&G is a relatively small player in the market, with a market share of around 2%.

Outlook for the UK Housing Market

The outlook for the UK housing market remains uncertain. Interest rates are rising, which is likely to put downward pressure on house prices. However, the UK government has announced a number of measures to support the housing market, including a stamp duty cut and a new mortgage guarantee scheme.