L&Q quarterly completions drop by half

Housing association giant L&Q has reduced the number of homes it is building by nearly half in the last financial quarter as it scales back development activity.

L&Q completed 701 new residential homes in the three months to 30th June 2023, a drop of 46% on the 1,295 completed in the first quarter of last year.

In a trading update, the housing association said its operating surplus was £68m, down 23% from its £89m surplus of the previous year. 

The number of homes in its approved development pipeline at the end of the first quarter of this year was 24,934, down from 28,261 a year ago. Just 92 additional homes were approved in the period, compared to 206 in the first quarter of last year.

L&Q said it expects to start construction of around 1,100 homes and make around 3,000 handovers in the financial year to March 2024.

In February, L&Q’s bosses said they planned to wind down its development programme after giving up in 2021 on its previous target to build 10,000 homes per year.

In the latest update, Waqar Ahmed, group director of finance at L&Q, said: “[Our latest] trading results continue to reflect our stated objectives to divert a greater level of expenditure towards our resident’s existing homes through our £3bn major works investment programme to address our strategic priorities of health and safety, quality of homes and improving services.”

Ahmed said L&Q had invested £77m over the past 12 months to address damp and mould, fire safety, energy efficiency and wide-ranging estate improvements across its 105,500 properties.

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Last month the housing association was rapped by the Housing Ombudsman over poor customer service and ordered to pay more than £140,000 in compensation to residents.

The Ombudsman had found 24 cases of severe maladministration and ordered L&Q to pay £141,860 in total.

This week’s trading update said L&Q had carried out 20,000 home visits, inspected 1,031 of the 1,800 buildings required by new building safety laws, begun remediation work on 74 buildings and installed or upgraded fire alarm systems in nearly 3,000 homes.

Ahmed added: “Our commitment to lower our risk profile and focus on our existing development pipeline is reflected by the continued reduction in homes approved…and declining housing starts and completions.” 

“We continue to remain cautious noting prolonged cost inflation and increasing mortgage rates which is impacting buyer affordability. Reservations for outright sales remain subdued, however, the shared ownership market continues to be resilient despite market headwinds.”