Lloyds Banking Group (LLOY.L) has put spades in the ground in its mission to become the UK's largest landlord amid a push into the residential housing market, as it launched a new £300m ($409.8m) fund with Homes England.
The move, announced on Wednesday, aims to "bridge the homebuilder funding gap, allowing housebuilders to build more homes across the UK and grow their businesses."
Housing England said the new fund will support a wider range of housing tenures to meet the UK’s diverse and evolving housing needs.
The new £300m commitment will help Housing Growth Partnership achieve its target of supporting the development of 10,000 new homes by 2025.
The new fund will be broader in scope to enable investment into larger housebuilding projects with a development value of up to £75m.
It will offer support for the delivery of a wider range of housing projects including Build to Rent, Regeneration, and Retirement Living. The partnership will also look to prioritise projects with a greater sustainability focus, as well as those using modern methods of construction and other evolutionary construction methods.
Since its launch, the Housing Growth Partnership has invested alongside 46 housebuilders to support the delivery of over 4,568 new homes, with nearly half now completed and sold to homebuyers across the UK.
In August it emerged that Lloyds was making a play for the residential property sector in the UK, targeting the purchase of 50,000 homes by 2030
The move came in conjunction with the bank's recently launched Citra Living brand.
As low interest rates take hold, Lloyds has looked to diversify its offering away from traditional lending.
The bank will take a staged approach to its push into the property market and has recently signed a strategic partnership with property development firm Barratt Developments (BDEV.L).
An internal job ad showed Citra has set a "strategic challenge" of owning 10,000 properties by 2025, increasing to 50,000 by 2030. By 2025, the balance sheet would be worth about £4bn and generate about £300m in pre-tax profit, the advertisement said.
The UK's largest mortgage lender started its Citra push in July, buying 45 flats at the Fletton Quays development in Peterborough as its first purchase. At the time it said it aimed to acquire around 400 properties by the end of the year, and wanted to target 800 for 2022.