The bank expects to have its first tenants within the next few weeks in Fletton Quays in Peterborough under the new brand name “Citra Living”.
Lloyds added its plans are to acquire around 400 properties by the year-end and double that number over the following twelve months.
Andy Hutchinson, Citra’s managing director, told the FT that Lloyds was in discussions about purchasing other developments already under construction, but eventually aims to build the bulk of its portfolio through partnerships to develop new sites from scratch.
Lloyds is one of the UK’s largest mortgage lenders and the move into property rentals while seen=mngly a logical extension of this also highlights the pressure on retail banks to make money with interest rates almost at zero.
Partnerships are a fast-growing sector of the property market with today housebuilder Countryside Properties saying it was giving up on its own private house development to focus solely on working with partners.
This will include local authorities, housing associations and also private rentals (PRS) of the type planned by Lloyds.
In the past, retail banks have demonstrated a poor record in diversifying outside of their core areas. PPI or payment protection insurance, for example, has cost Lloyds more than GBP20bn in compensation payments.
Today’s news coincided with the first fall in house prices since January as the Covid-19 stamp duty holiday window closes.
Month-on-month, the average price slipped by 0.5% in June to GBP260,358, a drop of GBP1,284 from GBP261,642 the month before, but the trend recently has been strongly upwards.
Year on year, Halifax said property prices were still up 8.8% with the strongest growth recorded in Wales, Northern Ireland and north-west England.
Shares in Lloyds rose 0.3% to 46.6p.