Lloyds Banking Group will become the single biggest shareholder in McCarthy & Stone, the debt-laden housebuilder taken private by a team led by HBOS and Scottish investor Sir Tom Hunter close to the peak of the housing boom.

The UK’s biggest builder of retirement homes will be put through a debt-for-equity swap that will see £200m of its £700m senior debt pile written off in exchange for 100 per cent of the company’s equity.