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Senior MP warns Lloyds Bank over grabbing first time buyer flats

The chairman of the Commons housing, communities and local government committee has criticised the institutional bulk-buying of existing homes for denying first time purchasers a chance to get on the ladder.

Lloyds Bank is one of a number of major businesses from outside the traditional property sector to have revealed plans to bulk-buy existing homes and let them out.

Now Labour MP and committee chair Clive Betts has told The Times: “If it is the case that these sorts of investments are forcing out, or jumping in front of, first-time buyers then that is where problems start to occur.

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“The housing crisis continues to loom large and we should be doing everything to allow first-time buyers on the property ladder, not allowing them to be pushed to the back of the queue.”

Lloyds Bank - which in recent months has set out broad proposals to become a residential landlord - says it’s set itself a ‘strategic challenge’ of buying 10,000 properties by the end of 2025, then 50,000 by 2030.

The bank is not so far building its own homes in the way of a Build To Rent operator but is for now buying new-builds; The Times reports that it’s snapped up 45 of 358 new flats at the Fletton Quays block in Peterborough.

Betts adds that many Build To Rent investments provided new development and says that as long as these are additional to properties for first-time buyers, they play an important role in the housing market.

Lloyds says that a subsidiary set up to handle its acquisition and letting of properties - a company called Citra - would have a balance sheet worth £4 billion and generate £300m million pre-taxprofit with 10,000 homes. 

It says Citra may consider mergers and acquisitions or strategic alliances to reach the 50,000 target.

The Times piece - which conflates the Lloyds bulk purchase with Build To Rent and Real Estate Investment Trusts - can be seen here.

  • Peter Hendry

    Lloyds Bank cannot resolve the housing crisis alone, however good their intentions.

    The correct way to resolve the crisis in the British housing markets is being blocked by the iceberg of political thinking in Westminster.

    It’s no good just helping some people, by making larger loans to them!

    Doing that would be utilising the vulnerability which allows house prices to rise and the illusion of good times for all, when in actual fact houses are simply becoming less and less affordable by the majority.

    The government is doing itself no favours by pursuing such a policy at a time when many people, especially the younger generations, hope for the prospect of having sufficient accommodation at price levels which are affordable and in sufficient quantity to satisfy their increasing level of demand.

    The political will, not to enable this, appears to be like a giant iceberg floating in the path of those wishing and needing to make something of their lives. A path other than being tethered to ever increasing financial commitment that saps away the very creativity they are being born to bring fruit to all of our lives.

    If those in Parliament cannot see this happening through the fog of their own deliberations then everyone will suffer, including the politicians entrusted with bringing us a brighter future rather than a much bleaker one.

    The correct way to resolve the crisis in the British housing markets is to lower the cost of housing whilst increasing its supply in an orderly and environmentally considered way.

    For the exact way this might be achieved please see the corrections set out in The Hendry Solution, which is fully accessible online.

    Comments are welcomed there.

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