Lloyds Banking Group PLC (LSE:LLOY) plans to expand its private rental housing arm into social housing, while also converting some of its disused office sites into more affordable housing.
The UK's largest lender is selling a former data and office space in Pudsey, West Yorkshire, to a housing developer with the agreement that 80 new homes will then be rented at about half the usual rate.
The FTSE 100-listed bank said it would be "the first UK bank to actively enter the market to own good quality housing available to house families at risk of homelessness", with its Citra Living arm sourcing housing "to address the particular needs of local authority areas".
Citra will buy the homes and remain the landlord, with local authorities responsible for day-to-day management.
With construction of the Pudsey site not expected to begin until 2026, Cambridge will be the location for Citra's pilot social housing scheme, which it plans to roll out to other UK cities in time.
It will buy homes and offer rents priced at 80% of local market rents, with Lloyds saying this pilot "will focus on directly supporting families currently presenting as homeless or those in temporary unsuitable accommodation".
Group chief executive Charlie Nunn said Lloyds had provided £17 billion of "support" to the social housing sector since 2018.
Nunn also encouraged other companies to consider similar moves.
Lloyds also said it is committing £200 million for social housing providers.
“We’re also making a major financing commitment to housing providers, and through Citra Living we will own good-quality homes to be made available for those most in need. In partnership across the private, public and third sectors, we can create more good-quality, genuinely affordable homes,” Nunn said.