Lloyds is the first major bank to become a private owner


Lloyds Banking Group to buy first property in sweeping plans to become a private owner

Lloyds Banking Group is preparing to buy its first property as part of sweeping plans to become a private owner.

City sources said the bank was set to secure an apartment building in Nene Wharf, Peterborough, and could start renting them out as early as next month. It is understood that there are nearly 50 apartments in the block.

New direction: entry into private rental market could allow Lloyds to sell other products to potential tenants

The spectacular move from Britain’s largest lender marks the first time a major UK retail bank has entered the private rental market. Lloyds is expected to manage its new property through a subsidiary called Citra Living, which was established this year, according to documents filed by Companies House.

The plan, named Project Generation, aims to provide another source of income for Lloyds. Banks are under pressure from record interest rates, which are squeezing loan profits, as mortgage rates have been cut.

Entering the private rental market could allow Lloyds to sell other products to potential tenants, such as insurance or loan for deposits.

This will pit the bank against real estate developers and institutional investors such as pension funds that have recently built up in real estate assets for higher returns. Meanwhile, there are now fewer hobbyist owners with just one or two properties after the tax breaks have been reduced.

The demand for housing is on the rise. The Office for National Statistics predicts that there will be more than four million new households by 2041, an increase of 17%.

Concerns are also growing that more first-time buyers are being pushed out of the market and forced to rent.

House prices rose 10 percent during the year through March, according to land register data. A report released last week by real estate agent Hamptons found that a typical first-time buyer will now find it cheaper to rent than to buy on a monthly basis, even as rents across the country have risen 7.1% over the past year.

Rental income is expected to continue to increase. High-end real estate agent Savills predicts rental values ​​will increase 17% over five years through the end of 2025.

Lloyds is the largest mortgage lender in the UK, with almost a fifth of the market. The group owns the Halifax, Scottish Widows and Bank of Scotland brands. The bank has also gone further in wealth management and insurance.

Lloyds said: “As we reported in our annual results in February, we are committed to expanding access to homeownership and exploring opportunities to increase our support for the UK rental sector.”


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