Lloyds Banking Group has announced plans to transform its unused office sites into social housing, marking a significant step towards addressing the UK's housing crisis.

The initiative comes in the wake of Labour's recent election victory and the new government's pledge to build 1.5 million new homes over the next five years.

The programme will commence with the conversion of a decommissioned data and office space in Pudsey, West Yorkshire. Lloyds will sell the site to a local housing group, with an agreement to create 80 new homes that will be rented at approximately half the usual rate. The bank is currently assessing other potential office and data centre locations across the UK for similar projects.

In a groundbreaking move, Lloyds is also expanding its Citra Living private rental arm to become the first UK bank in the affordable housing market. Charlie Nunn, Lloyds' Chief Executive, explained: "When you're in the affordable space, [which is] the low end of the private rental space, we think that's a really important pathway to home ownership."

The pilot scheme will launch in Cambridge next month, offering rentals to struggling households at 80 per cent of market rates. Citra Living will purchase the homes and act as landlord, while local authorities manage day-to-day operations.

Nunn is set to host an inaugural social housing forum in London, bringing together housing bosses and policymakers to discuss building one million social and affordable homes. He expressed cautious optimism about Labour's commitment to addressing the housing crisis, stating, "Labour's commitment to it is clearer than the last government. We obviously didn't see, in the last period of time, some of the changes that would be needed to really unlock the level of the ambition that we think is needed for the UK to prosper going forward."

The bank is also ring-fencing £200 million in loans for small housing providers who might otherwise struggle to access funding. Nunn acknowledged that while there is a "low return hurdle" on these loans, it still "meets our shareholders' expectations".

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