What does Lloyds’ entry into the private rented sector reveal?

What does Lloyds’ entry into the private rented sector reveal?

  • Fabrik Invest flags up banking giant’s move as hedging against inflation and currency devaluation
  • Bulk property purchases by larger funds and family offices likely to follow
  • Property investment seen as a safe haven in times of economic uncertainty

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.

“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.”

Dale Anderson, Managing Director, Fabrik Invest

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 more larger funds and family offices investing in bulk purchases in property over the months ahead.

According to Fabrik Invest, there are other factors at play as well. MD Dale 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.”

Dale Anderson, Managing Director, Fabrik Invest

For more information, please contact Fabrik Invest on 020 8175 9891 or enquiries@fabrikinvest.com or visit http://www.fabrikinvest.com