Lloyds Banking Group plans to enter the UK rental market with 50,000 new homes.
The banking group will seek to take advantage of the incredibly low-interest rates in the market.
Already the UK’s largest mortgage lender, Lloyds Banking Group is now aiming to become one of its largest private homeowners, with a goal of buying 50,000 homes in the next 10 years.
Lloyds is the latest big name on High Street to enter the real estate market: It emerged last month that retailer John Lewis was considering plans to build 10,000 rental homes over the next decade. According to the accounting firm Blick Rothenberg, “everyone wants to become an owner.”
Lloyds has made no secret of its goals: at the beginning of last month, it announced its entry into the private rental market, becoming the first major British bank to make such a move. It revealed that its first development would be Fletton Quays in Peterborough, where 45 apartments would be available to rent over the next few weeks.
“The plan is to grow little by little.”
Lloyds Banking Group said at the time that the company, through an independent brand called Citra Living, “will initially start small.” However, an internal job announcement has revealed the scale of its ambitions, stating that Citra Living had set a goal of reaching 10,000 properties by the end of 2025, then 50,000 by 2030. If achieved, that would make it one of the largest owners in the UK.
An estimated one in five homes in the UK rents privately, and Lloyds predicts that demand will increase over the next five years. However, in recent years, many hobby homeowners who were drawn to the rent-to-buy boom have left the market due to regulatory and tax changes. Owning would also provide a new source of income for the bank at a time of historically low-interest rates.
Lloyds said last month that its goal was to acquire about 400 properties by the end of this year and double this goal next year. He plans to work with the home builders to identify the sites, and Citra Living will purchase the rental element for these new developments. The company recently entered into a strategic partnership with Barratt Developments, which describes itself as “the leading home builder in the country.”
The inside job advertisement, first revealed by the Financial Times, said that Citra Living had estimated that with 10,000 households it would have a balance sheet of around £ 4bn and generate around £ 300m in profit before tax.
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