According to Bloomberg, plans to create one of the largest mortgage brokers in the UK through this tie-up will no longer go ahead.
It was first reported that the two firms were in discussions in April, but neither confirmed or denied the plans at the time.
L&C declined to comment while Habito said it was exploring multiple options.
The spokesperson for Habito said: “We can’t comment on market speculation in relation to specific parties but can confirm that we’re exploring multiple strategic partnerships, a number of which are in advanced stages.
“We look forward to sharing our future plans in due course.”
Habito recently launched its first buy-to-let tracker mortgages which have no early repayment charges, and a tracker rate for the lifetime of the mortgage. This is available to brokers through L&G, Dynamo, Connect and Tenet.