A month ago we noted that John Lewis Partnership intends to enter the private rental market, building 10,000 new homes. Now Lloyds Bank has trumped that, intending to acquire up to 50,000 properties.
With interest rates looking set to remain low for years to come, Lloyds Bank is to diversify its income streams by entering the private rental market, underlining institutional confidence in the sector's long term prospects.
Its official announcement came last month with the launch of Citra Living, a specialist division that will acquire residential properties for rent. At the time, they expected to have a portfolio of 400 units by the end of this year and double that by the end of 2022.
Now the scale of their ambition has become clearer. According to a report in the Financial Times, Citra Living is targeting a portfolio of 5,000 properties by 2025 and 10,000 by 2030.
Should individual landlords be concerned by institutional investors?
Lloyds are the latest in a long line of institutional investors who have entered the UK residential market in recent years. Purpose build student accommodation is dominated by them, yet the majority of students continue to rent from small landlords. The size of the UK private rental sector has now reached £1.4 trillion. Institutions own a tiny percentage. With demand relentlessly growing, there is more than enough room for both.