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  • Writer's pictureInvestment Synergy Team

Lloyds Banking Group to become major UK landlord !

Their aim is to buy 50,000 properties by 2030 via its Citra Living arm, says report.....

  • Citra Living has a 'strategic challenge' to own 10,000 properties by 2025

  • Its first properties were at the Fletton Quays development in Peterborough

  • The FT's report comes in the first week of Charlie Nunn's tenure as Lloyds' CEO

Lloyds Banking Group, the UK's biggest mortgage lender, is aiming to buy 50,000 homes by the end of the decade, the Financial Times has reported.

The banking giant launched Citra Living last month to try and satisfy the growing demand for private rental housing across the country, but the FT also believes the move is motivated by a need to diversify its sources of income.

The newspaper's website said it had seen an internal job advertisement from Citra Living outlining some long-term targets including a 'strategic challenge' to own 10,000 properties by the end of 2025, with another 40,000 coming by 2030.

This would make it a larger company than Grainger, the country's biggest private residential landlord, and give it an estimated balance sheet of £4billion and £300million in pre-tax profit.

It has already purchased 45 flats at the Fletton Quays development in Peterborough as part of a separate target to acquire 400 homes this year followed by the same amount in 2022.

Citra may consider 'M&A (mergers and acquisitions) opportunities and/or strategic alliances' to help it reach the targets, the advert added.

Previously, the bank has been cautious about the new division's potential, with finance chief William Chalmers saying expansion into the private rental market would be 'on a limited basis while we explore the area'.

Several big-name fund management groups and insurers have entered the private rental market in recent years, including Legal & General and M&G. John Lewis also recently announced plans to convert unused floor space in its department stores into rental homes.

The switch from small-scale private landlords follows changes in tax rules which ended tax breaks on on mortgage interest and put limits on private residence relief.

It led to an exodus of such landlords from the private rental sector and worries that there might be too few rental homes available in the future.

A Lloyds spokeswoman said: 'As highlighted at launch, Citra Living will initially start small, with a focus on buying and renting good-quality, newly-built properties. This will be achieved by working alongside leading housebuilders to address the increasing demand for rental properties.

'The aim is to gradually provide incremental stock to the UK rental market over the coming years.'

The FT's report comes in the opening week of Charlie Nunn's tenure as chief executive of the bank following a nine-year period at HSBC where he rose to become the global head of personal banking and wealth management.

Diversifying: The Financial Times believes Lloyds Bank's move into the private rental business is motivated by a need to diversify its sources of income

Investment Synergy - Is this classed as a 'social housing' lower income rental sector .... much needed - or 'unsociable' and higher end rentals ?? will it help to solve the housing shortage ? or is BTR the better more sustainable answer ?

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