Lloyds Bank plans to become a large private landlord

Lloyds Bank is planning to move into the residential property market as a large private landlord, according to The Financial Times.

The bank, which is Britain’s biggest mortgage lender, is reportedly looking for new sources of revenue with interest rates at record lows.

Under the plan, called “Project Generation”, Britain’s biggest retail bank will buy and rent out new and existing properties across the UK, as it looks to boost profits.

Lloyds Banking Group saw its profits tumble by 72% to £1.2bn last year as it battled with the economic fallout of the coronavirus pandemic.

The bank told the FT: “As we stated in our full-year results and our strategic review last week, we are committed to broadening access to home ownership and exploring opportunities to increase our support to the UK rental sector.”

It added: “We are committed to broadening access to home ownership and exploring opportunities to increase our support to the UK rental sector.”

The BTU union for Lloyds employees warned against the idea, stating: “The private rental market is such a risky business and if things go wrong the bank’s reputation could take a hammering.”

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10 Comments

  1. JamesB

    The staff are right to be worried .. as they know that their ques are going to be populated by hostile tenants demanding to see the manager as their boiler hasn’t been fixed the moment they called !.  Before they know it the morons from acorn will be picketing outside their branches … they have no idea what landlords put up with … they will be front page news with tenant stories the press will be all over it

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    1. MickRoberts

      Brilliant James B.

      That’s exactly it. Bet they only.take the most posh credit worth tenants though

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      1. northernlandlord

        Yes, you will probably need to have an account with them with at least £50k in it and set up a direct debit for the rent. No housing benefit tenants for them!

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  2. Jim S

    Anyone with shares in Lloyds needs to start selling right now. The only winners here will be the managing agents and sub contractors who will juice any rental profit for what they can. Why don’t they just borrow the money to property investors at much more favourable terms and just make their cut on the interest rate charged like all banks have done for hundreds of years. They can make 3-4% margin on top of the money that they either have invested in their bank accounts from customers or even money that they borrow. I smell a rat here with this section of the bank going into administration in a few years time and the portfolio then sold at discount to the people that they already right now intend to sell it to. The failing portfolio won’t come on the open market that’s for sure.

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  3. Russell121

    Fantastic! I can’t wait to see this. I do wonder what goes through supposedly intelligent peoples heads when they have a these ideas.

     

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  4. rentpoint

    This was covertly punted to TSB/Lloyds Bank as long ago as 2006.  Took their time!

    But beware.  Abbey National’s Cornerstone, Halifax’s Estate Agencies and TSB Bank’s Letting Agencies did not fare well.

    This needs poached, experienced, innovative industry insiders to steer a reward-driven path.

    AND it still has even more merit – for Tenants and The Bank…moreso than John Lewis.

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  5. Simonr6608

    This was always going to be the case, the constant hammering of PRS landlord has meant many are selling up leaving the way for large corporations to fill the void. This will drive up rents and possibly start the death knell for the smaller agents as the business is passed on to the likes of the large corporate agents.

     

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  6. paulgbar666

    Good luck to all these dopey corporates.

     

    There was a reason they all got out of residential letting in the 60’s.

    Mostly the ridiculous Tenancy regulations.

    Well now the PRS is returning to those daft days of rent controls; sitting tenants and impossibility of evicting.

    If corporates want to suffer the horrendous losses then they will need to be aware that feckless rent defaulting tenants cause LL losses of over £9 billion a year.

    Bound to hit dividends!!

    Corporates will lose billions.

    They are very naive.

    The new even more bonkers anti-LL regulations are coming soon.

    Corporates might like to ask themselves why LL are selling up?

     

     

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  7. Robert_May

    Something significant was  just announced, it is important that letting agents and property managers have an understanding of the implications of this.

    The lack of opinion and comment from the industry advisors and gurus  this story should have attracted suggests they  either missed this announcement, don’t understand the ramifications or they’ve got this and  will deal with it when it happens.

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  8. paulgbar666

    Nothing wrong with Corporates entering the market.

    It is after all an open market.

    It isn’t however a fair market.

    Corporates are allowed to offset their finance costs against income.

    Not so mortgaged sole trader LL.

    But there is no doubt that the increasing corporate offers will remove the need for LA and property managers.

    These corporates will provision all that they need.

    The LA industry relies on lots of LL being in the market.

    Reducing numbers of LL are very bad for the LA businesses.

    But hey market participants change.

    That’s capitalism for you.

    Whether the Corporate offer will be one that many tenants want remains to be seen.

    But the increasing Corporatisation of the PRS means much reduced business for LA.

     

    With the decline in commercial activity corporates have seen an ideal pension fund replacement.

    Offices and shops might not pay any rent but there will always be the tenants paying rent come what may.

    The days of commercial activity funding pension funds is over.

    Getting into residential lettings is what the corporates will be doing.

     

    After all most LL get into the game to provide for a pension.

     

    You can’t blame the corporates for wanting a piece of the pie now that commercial activity is in decline.

    White vans now do much of the High St shopping by delivering what consumers want directly to their home address.

    It would suit the corporates to buy up all the flat blocks.

    Though I’ve seen that they are venturing into BTR housing.

    So stepping on the traditional LL toes.

    Nothing wrong with that.

    The times they are achanging

     

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