New income source
Lloyds poised for move into private rental sector
Lloyds: Lender to landlord (pic: Terry Murden)
Lloyds Banking Group is poised to become the first UK retail bank to move into the private rental sector.
It is said to be close to acquiring a number of flats which would be managed through a subsidiary called Citra Living.
Banks are feeling the squeeze of record low interest rates, which are crushing profits from lending.
The PRS plan, codenamed Project Generation, is aimed at bringing in another source of income for Lloyds.
Sources said the bank, which owns Bank of Scotland, Scottish Widows and the mortgage lender Halifax, is close to securing a first block of flats in Peterborough.
Institutional investors such as pension funds have been piling into real estate assets, though some have been stung by recent pricing pressures in the office market, and some property funds have been closed.
The residential market has not only held up but is booming with demand for both privately-owned and rental properties.
Estate agent Savills forecasts that rental values will grow by 17% over the next five years.
Lloyds told Mail Online: “As we stated in our full-year results in February, we are committed to broadening access to home ownership and exploring opportunities to increase our support to the UK rental sector.”