Lloyds Banking Group is planning to become a private landlord by acquiring around 400 residential properties by the end of 2021 and another 400 next year. The properties will be purchased under the group’s new brand, Citra Living, and will be privately rented by the bank.
Citra will be a standalone brand of the bank focusing solely on the residential property rental market and has not yet announced the anticipated total size of its property portfolio.
Lloyds says its aim to become a private landlord demonstrates its commitment to Helping Britain Recover, by directly supporting the rental sector at a time when rental housing supply is under threat. Traditional private landlords are reducing in number as regulation and tax changes make it more difficult to turn a profit. The group says it will make quality and affordable homes available to the one in five households that currently rent privately in the UK.
Citra’s managing director, Andy Hutchinson, said that the portfolio is likely to be built mainly through partnerships with developers of new build homes. Citra Living will buy the rental properties on new developments, which will be located at sites with easy access to public transport and local amenities.
The first of the homes to be built for the budding private landlord will be at Fletton Quays in Peterborough where Citra will buy 45 apartment properties.
Mr Hutchinson, said: “We want to ensure everyone has access to stable and affordable homes. For an increasing number of people that means renting, but it shouldn’t mean quality is compromised. In order to meet the growing demands of the rental market, Citra Living will look to partner with developers to ensure a consistently high standard of properties is available to rent. Through Citra Living we want to ensure more people have access to good quality, affordable, new build rental properties, that they can consider their home.”
The Build to Rent sector has provided over 10,000 new homes in each of the last two years, although the pandemic caused an 18% drop in completions during 2020. Most of the properties completed last year were built in London, where the number of build to rent homes completed rose by 58% to 5,558 properties. Nearly 20% of all homes completed in London over this period were build to rent, while nationally the number of completions was just 4%.
The British Property Foundation (BFP) said that, over the last decade, more than 50,000 build to rent homes have been built in the UK and there was continued growth in the sector – including over 89,000 in the planning process, most of which were in regions outside London.
The director of real estate policy at BPF, Ian Fletcher, said: “There remains a significant opportunity for the sector to increase its share of completions in our regional cities and towns, further supporting local housing supply ambitions, and this will include more suburban houses that families can call home.”