Lloyds Banking Group aims to become the UK’s largest private landlord hedging against inflation

Lloyds Banking Group aims to become the UK’s largest private landlord hedging against inflation

9:03 AM, 22nd September 2021, About 4 weeks ago 6

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Lloyds Banking Group has launched a new brand, Citra Living, through which to pursue its aim of becoming the UK’s largest private landlord. The banking giant plans to purchase 50,000 properties over the coming decade. What can we tell from this?

According to the team of financial and property experts at Fabrik Invest, Lloyds’ designs on the private rented sector reveal plenty. MD, Dale Anderson, comments:

“If banks are buying property, this indicates that they’re hedging against potential inflation and the potential devaluation of the pound. With everything going on in the world, banks and governments naturally had to take into account quantitative easing, which means they’re going to be printing more money to stimulate the economy. It looks like Lloyds is now putting a strategy into action to take advantage of the repercussions of that.”

The UK’s record low borrowing rates also come into play, with banks jumping on the bandwagon and investing. Other corporate and larger clients are doing the same, meaning we’re likely to see larger funds and family offices investing in bulk purchases in property over the months ahead.

There are other factors at play as well and Anderson flags up cryptocurrencies such as Bitcoin as an example:

“Inflation and monetary value aren’t what they used to be. Cryptocurrencies have given people more control over currencies, and banks less so, so that’s a factor that’s feeding into Lloyds’ move as well. Then, of course, there’s the traditional position of bricks and mortar being a safe haven in times of economic uncertainty.”

As inflation rises and the prices of things go up, individuals and enterprises alike will be looking to invest in bricks and mortar, along with other hard assets such as gold, silver and land. It’s a pattern that has played out many times over recent decades.

Then there’s the housing market itself to consider. Demand continues to outstrip supply for homes in the UK. As a country, we haven’t been building houses fast enough for years.

“That underlying lack of supply means the property sector is a safe bed for Lloyds. With uncertain economic times on the horizon, we’re likely to see many larger institutions looking to the housing sector to provide solid medium- to long-term investment potential. It’s an encouraging sign for individual investors, as it shows the validity of property investment as a money-making strategy.”



Comments

by Rosanne Turvey

11:17 AM, 22nd September 2021, About 4 weeks ago

This sounds absolutely great but let's hope all these apartments don't end up like our investment. We purchased an apartment in the heart of Cardiff Bay in 2007. It was an absolutely fabulous apartment. We were told it was going to double in value. Unfortunately what they didn't take into account was the fact that the Company who built the apartments cut a lot of corners when building them and we are now left with an apartment that we can't sell as it is not mortgageable. The build quality is absolutely appalling - they did not put any fire compartmentation in. The balconies are becoming dangerous and a lot of other problems too numerous to mention. Our Management fees have gone up considerably (as have a lot of other apartment blocks) and we are now faced with a bill of £30,000 per apartment to get everything fixed. Hope all these apartments that Lloyds are investing in don't end up the same!

by Dylan Morris

12:32 PM, 22nd September 2021, About 4 weeks ago

Now we know why they introduced Clause 24

by Mick Roberts

15:37 PM, 22nd September 2021, About 4 weeks ago

Looks like Lloyds bank is about 20 years behind me then.

I took on dozens of trackers in 2007.
And if they've only just sussed out that Demand is outstripping supply, well yeah.... That's why I don't invest with Lloyds bank.

by Highview Properties

7:27 AM, 23rd September 2021, About 3 weeks ago

Remember, Lloyd's were car sales outfit once oh yea and estate agents too , dreamers

by Bruce Patterson

7:09 AM, 25th September 2021, About 3 weeks ago

Reply to the comment left by Rosanne Turvey at 22/09/2021 - 11:17That’s really tough Rosanne - I bought a new build flat in 2006 with sea views for £96,000 hoping for the same doubling in value - sold it last year for £88,000 - as time when on the really poor workmanship became apparent - huge management fees, leaking windows, dreadful balconies, cheap materials etc - since then I’ve stuck with ex local properties - solid brick construction, slate roofs many with new CH boilers - much less problems overall and little or no voids and modest capital growth - I’m so glad I sold it though - the stress of it all has gone and you move on to better investments - I would get it fixed ASAP and get rid if you can - life’s too short

by Beaver

11:29 AM, 27th September 2021, About 3 weeks ago

It's funny isn't it that the institutions bailed out by the government using tax-payers money during the last financial crisis now intend to be the largest landlords in the PRS?


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