Lloyds Bank Entering Rental Market

Lloyds looking to become the largest landlord in the UK as they enter rental market

August 25, 2021
Lloyds Bank Entering Rental Market
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Lloyds Banking Group has launched a new private landlord brand and is aiming to become one of the largest private landlords in the UK over the next decade.

It has announced plans to launch its Citra Living Brand imminently, with a view to owning 10,000 homes in the UK by 2025. It will then, if plans progress, purchase another 40,000 properties to rent out to UK families, couples and individuals.

Starting Small

The plan for Lloyds is to get started immediately with 400 homes in the next four months, establishing the brand by the end of the year. The plan will then be to double that target, buying another 800 in 2022. The first site has already been acquired, with 45 apartments at Fletton Quays in Peterborough.

The bank is already the largest mortgage lender in the UK, with almost 25% of homeowner loans provided by the group. This move will potentially put it at the top of both the homeowning and private renting markets.

The Financial Times, which originally broke the story, reports that if the bank does reach its target of 10,000 homes by 2025 it will be larger than Grainger, which is currently the UK’s largest private residential landlord, owning just over 9,000 properties with a market capitalization of just over £2 billion.

Based on the estimates that form the Lloyds plan, the value of the portfolio by 2025, with property prices and rental estimates, would be around £4 billion, creating pre-tax profits of approximately £300 million a year.

The plan, according to the managing director of the new Citra Living brand, is to work with leading housebuilders to identify good sites for development, and then buy the properties on them for tenants, “ensuring continued support for the housebuilding sector”.

They are not the only major UK brand to enter the residential housing market in recent months, although they are the first bank to make such an announcement this year. John Lewis, the UK’s famous department store, has said that it intends to convert some unused floor space in its stores into rental homes, to help meet the demand of the market

New Horizons for Lloyds

This new rental living brand comes only a month after the bank confirmed it had bought the Embark Group, a retirement platform, for £390 million. The plan is for the bank to start offering more tailored retirement savings accounts and pensions, broadening its portfolio further.

At the same time as the bank is expanding into pensions and rental properties, it continues to close high street bank branches in a bid to save money. The group announced in June that another 44 branches would be closed this year on top of previously announced closures, bringing the total for 2021 to 100.

It’s clear that Lloyds is using this time of financial recovery after the pandemic to re-evaluate its options and portfolio and determine how it wants to generate revenue in the future.

Ian Lewis
Ian Lewis
Ian is an experienced writer with 15 years’ experience working in journalism and marketing. He’s worked in-house in financial institutions as well as writing freelance pieces for a variety of banking and financial trading websites.

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About Lloyds Bank Lloyds Bank is a British retail and commercial bank. One of the ‘Big Four’ clearing banks, it was founded in Birmingham in 1765. It is the largest retail bank in...
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