L&Q housing starts down 40%

The number of new homes started by L&Q fell by nearly 40% in the last quarter, the housing giant said in a trading update yesterday.

It also saw the number of homes completed drop by 7%, to 1,997.

The news follows L&Q’s decision to pause work on some new developments in the autumn in the wake of challenging conditions in the London housing market.

Around half of the homes that L&Q builds are affordable, with the rest for market sale – the vast majority subsidised by the government’s Help to Buy scheme.

L&Q said the decision to put schemes on hold had stabilised its finances, which had been hit by the weak market and cost of improving existing properties in the wake of the Grenfell Tower tragedy. The organisation reported a surplus of £215m for the period, exactly the same as in 2018.

Group finance director Waqar Ahmed said: “The prudent measures that L&Q has implemented during the course of this financial year, including reassessing new scheme appraisals and where necessary placing these on hold, the reappraisal of existing commitments, the selective nature of new business opportunities and determining pace has allowed L&Q to make good progress against our current priorities”.

Ahmed also said the organisation had seen “positive signals emerging in the latter part of the quarter from the sales market”, supporting other reports of a post-election bounce in housing market activity in the capital.

However, he added: “L&Q will continue to act with prudence and take a measured approach as we seek to reduce the level of volatility and risk within our development programme.”

The organisation is operating from 169 sites with a development pipeline valued by it at £6.7bn, of which £5.6bn is committed.