L&Q completions up 7% in first half of the year

Housing association giant L&Q completed construction of 2,151 homes in the first half of its financial year, up 7% on the 2021/22 figure.

Releasing results for the six months to September 30, L&Q said it now had 120,270 homes under management, up from 118,434 in March, and had turned over £533m in revenue – just £2m less than the prior year.

The figure of 2,151 completions in the first half of the financial year compares to 1,997 in the first half of 2021/22. This number puts the landlord on course to top last year’s housing completions figure of 4,157 – itself thought to be a record not only for L&Q but for the housing association sector overall.

Earlier this year new chief executive Fiona Fletcher-Smith told Housing Today that L&Q was likely to deliver anything up to 5,000 homes in the current 2022/23 financial year.

However, the numbers came as the social landlord said it had now reduced its expectations on capital expenditure for the current financial year in light of the increases in interest rates and inflation – but did not say whether that reduction would come from investment in existing stock or new build development.

Waqar Ahmed, group director, finance said L&Q’s operating performance was “broadly line with expectations” but that “to offset the latest market inflation and interest rate assumptions, L&Q has lowered its guidance on gross capital expenditure through to the year ending 31 March 2023 resulting in a corresponding reduction in guidance for net debt”.

Ahmed said that broader guidance for the current year remained unchanged, but added: “wider economic uncertainty, a continuation of financial market volatility and its impact on the mortgage market, supply chain constrains and the pressures on cost of living caused by inflation and interest rates have the potential to impact our residents, those looking to purchase our properties and our forward guidance.”

In addition, the landlord’s latest development pipeline figures indicate the business is starting to reduce its development appetite, in line with arevised strategy set out by the new chief executive. L&Q had been targeting delivery of 10,000 homes under prior to Fletcher-Smith’s appointment, but the new chief executive has said the business will target 3,000 homes a year for the foreseeable future.

L&Q’s results statement said the firm was now operating from 185 active sites, down from 199 in Q2 last year, and had 28,341 homes in the approved development pipeline, down from 31,739. The amount of plots held in strategic landholdings had also reduced, from 81,102 last year to 75,551 now.

L&Q said it had 1,339 homes held as unsold stock worth £211m, of which 80% were for shared ownership.