Lloyds Banking Group, the largest mortgage lender in the UK, has embarked on a significant initiative to repurpose its old properties into desperately needed social housing.
Following a comprehensive reassessment of its property portfolio in the wake of the pandemic, Lloyds identified several properties suitable for conversion into social housing. The first confirmed project is located in Pudsey, near Leeds, where an existing data centre will be closed, with staff relocating to nearby offices. The conversion plan involves securing planning permissions and subsequently selling the property to a developer at a reduced price, contingent on its use for social housing rather than more lucrative ventures like student accommodation. Lloyds estimates the Pudsey site could yield 80 new homes available for rent at discounted rates, contingent upon successful planning approval within two years.
Charlie Nunn, CEO of Lloyds Banking Group, stated, “Everyone has the right to build a future from the foundation of a secure home. Social housing is part of this country’s critical infrastructure, and we need to direct and increase investment into the right homes in the places they’re needed most.” This initiative aligns with the Labour government’s ambitious target of constructing 1.5 million homes over the next five years. Nunn has also urged other large companies with unused buildings to consider similar conversions. However, he acknowledged the challenges associated with such projects, noting that not all old office buildings are easily adaptable for housing due to structural issues such as ceiling heights and floor layouts.
Financial viability of these conversions also varies, often being more feasible in regions with higher property values like London. To support this initiative, Lloyds is allocating an additional £200 million in financing to small housing providers and charities, particularly those aiding the homeless or individuals with special needs. Lloyds has already provided £17 billion in support to the social housing sector over the past six years.
Furthermore, Lloyds will become the first British bank to own and rent out affordable homes through its subsidiary, Citra Living, which was launched in 2021 to diversify income streams. Citra Living is expected to start a pilot scheme next month in Cambridge, with plans to expand to other cities. This venture aims to collaborate directly with local authorities to offer below-market-rate rentals to struggling households. Nunn added, “We’re making a major financing commitment to housing providers and through Citra Living we will own good-quality homes for those most in need. In partnership across the private, public, and third sectors, we can create more good-quality, genuinely affordable homes.”
Lloyds’ initiative to convert old buildings into affordable housing represents a substantial commitment to addressing the UK’s social housing shortage. Through strategic financial allocations and partnerships, the bank is set to make a lasting impact on the housing sector.
