One of Britain’s biggest estate agency groups is drawing up plans for an £800m sale amid speculation that Rachel Reeves, the chancellor, is plotting a fresh tax raid on homeowners in her autumn Budget.
Sky News has learnt that LRG, which is owned by the American buyout firm Platinum Equity, is being groomed for an auction that would take place during the coming months.
Bankers at Rothschild have been appointed by Platinum to oversee talks with potential bidders.
Platinum acquired LRG, which owns brands including Acorn, Chancellors and Stirling Ackroyd, in January 2022.
The estate agency group, which handles residential sales and lettings, trades from more than 350 branches and employs approximately 3,500 people.
City sources said this weekend that Platinum believed a valuation for the business of well over £700m was achievable in a sale.
The US-based private equity investor bought LRG – then known as Leaders Romans Group – from Bowmark Capital, a smaller buyout firm.
Bidders in this auction are also likely to include financial investors.
Some of LRG’s brands have a long history in the UK property industry, with Portico tracing its origins as far back as 1818.
The company, now run by chief executive Michael Cook, manages 73,000 properties and last year handled property sales worth £3.6bn.
Although prospective bidders for LRG have already begun being sounded out, an auction of the group is likely to take several months to conclude.
Industries such as banking, housing and gambling have been gripped by suggestions that the chancellor will target them in an attempt to raise tens of billions of pounds in additional revenue.
Last month, house prices fell unexpectedly – albeit by just 0.1% – amid warnings from economists about the impact of speculation over a tax raid on homeowners.
Reports in the last two months have suggested that Ms Reeves and her officials at the Treasury are considering measures such as an overhaul of stamp duty, a mansion tax and the ending of primary residence relief for properties above a certain value.
Her Budget, which will take place in late November, is still more than two months away, suggesting that meaningful discussions with bidders for businesses such as LRG are unlikely to take place until the impact of new tax measures has been properly digested.
Robert Gardner, chief executive at Nationwide, the UK’s biggest building society, said reform of property taxes was overdue.
“House prices are still high compared to household incomes, making raising a deposit challenging for prospective buyers, especially given the intense cost of living pressures in recent years,” he said earlier this month
Britain’s estate agency market remains relatively fragmented, with groups such as LRG spearheading myriad acquisitions of small players with fewer than a handful of branches.
Among the other larger operators in the market, Dexters – which is chaired by the former J Sainsbury boss Justin King – is also backed by private equity investors in the form of Oakley Capital.
Few estate agents now have their shares publicly traded, with the equity of Foxtons Group, one of London’s most prominent property agents, now worth just £168m.
Platinum Equity declined to comment.
