Lloyds Banking Group PLC's (LSE:LLOY) residential landlord arm has snapped up over 150 new properties from housebuilder Barratt Developments PLC (LSE:BDEV).
The 156 houses, situated in Matson, near Gloucester, will be offered to renters by Lloyd's Citra Living arm, adding to its portfolio of more than 2,000 properties across the country.
Citra and Barratt formed a strategic partnership in August 2021, since when more than 1,500 homes have been brought to market in counties including Bedfordshire, Northumberland, Lancashire and the south west.
Lloyds launched Citra in July 2021 with the plan to purchase some developments already under construction but build the bulk of its portfolio through partnerships to develop sites from scratch.
As the UK’s largest mortgage lender, the move into property rentals was seen as a logical extension amidst pressure on retail banks to make money with interest rates almost at zero, despite the sector's poor record in diversifying outside of its core areas.
However, the Bank of England began to hike rates later that year, eventually topping out at just over 5%, which has put the brakes on the property market.
Citra's latest results filed with Company House show it made a £1.3 million loss for calendar 2022, up from £0.7 million in its first year. The balance sheet showed assets of £109.4 million, up from £19.1 million.