Lloyds Banking Group has announced plans to convert several of its old buildings into affordable homes, commencing with a soon-to-be decommissioned data centre in West Yorkshire.
As Britain’s largest mortgage lender, Lloyds has been reassessing its property portfolio post-pandemic and identified certain properties suitable for conversion into much-needed social housing. The first confirmed site is in Pudsey, near Leeds, where the data centre is closing, with staff relocating to nearby offices. Lloyds aims to obtain planning permission for the conversion before selling the property to a developer at a reduced price, conditional on the creation of social housing instead of more profitable ventures like student accommodation.
Lloyds estimates that the Pudsey site could be transformed into 80 new homes, which would be rented at discounted rates. Construction is expected to commence within two years, contingent on successful planning approval.
“Everyone has the right to build a future from the foundation of a secure home,” said Charlie Nunn, CEO of Lloyds Banking Group. “Social housing is part of this country’s critical infrastructure, and we need to direct and increase investment into the right homes in the places they’re needed most.”
This initiative aligns with the new Labour government’s ambitious target of constructing 1.5 million homes over the next five years. Nunn has also called on other large companies with unused buildings to consider similar conversions.
However, challenges exist, as not all old office buildings are easily adaptable for housing due to issues like ceiling heights and floor layouts. Additionally, the financial viability of such projects varies by region, often being more feasible in areas with higher property values like London.
In support of this initiative, Lloyds is allocating an additional £200 million in financing to small housing providers and charities, particularly those focused on assisting the homeless or individuals with special needs. Over the past six years, Lloyds claims to have provided £17 billion in support to the social housing sector.
Furthermore, Lloyds will become the first British bank to own and rent out affordable homes through its Citra Living division, launched in 2021 to diversify its income streams. Citra is set to start a pilot scheme next month in Cambridge, with plans to expand to other cities. This venture aims to work directly with local authorities to offer below-market-rate rentals to struggling households.
“We’re making a major financing commitment to housing providers and through Citra Living we will own good-quality homes for those most in need,” Nunn added. “In partnership across the private, public, and third sectors, we can create more good-quality, genuinely affordable homes.”
