L&Q reports deficit for first half of the year

L&Q has reported a deficit in the first half of its financial year due to £119m in accounting losses related to the sale of its strategic land business in August.

The 105,000-home housing association, in a trading update for the six months to 30 September, reported a deficit of £21m. This compares to a £51m surplus for the same period last year.

Waqar Ahmed, group director of finance at L&Q said the results include the accounting impact of the sale of L&Q Estates to Urban & Civic, which completed on 6 August.

He said: “We’re immensely proud that since acquiring L&Q Estates in 2017, we’ve enabled the delivery of over 11,300 new homes, of which 1,800 have been built by L&Q.”

“This deal [to sell L&Q Estates] simplifies our business and has generated additional cash revenue which will be reinvested into our existing homes and services.”

He also said that the deal aligns with the groups’ longer-term ambition to concentrate in ts core areas of Greater London and Greater Manchester rather than the wider south and midlands.

“We continue to rationalise stock that is either outside of our core geographies or uneconomic to maintain for the safety and comfort of our residents.”

L&Q also incurred expenses of £116m relating to interest payments on its borrowing, compared to £103m the previous year.

In terms of development, L&Q said it delivered 950 new homes in the first half of the 2024/25 financial year, down 30% from 1,350 homes during the same period last year.

However, the number of new homes started on site rose year-on-year, increasing from 228 to 472.

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Of the 950 new homes delivered, 746 were social and affordable housing, and 204 were for market tenure.

L&Q’s development pipeline at the end of September stood at 10,520, down slightly on the 10,783 in the first half of 2023, with two-thirds of the homes under construction.

In September last year, L&Q announced that it would be reducing its annual development to around 3,000 homes in the coming years as it focuses on spending more on existing stock. Ahmed said that investment in L&Q’s development pipeline continues to reduce in line with its objective to “derisk” its business and invest in existing homes.

L&Q’s development pipeline is estimated at £2.4bn of which £1.9bn (78%) is currently committed.

Ahmed said: “L&Q’s Q2 unaudited results reflect delivery against our stated strategic objectives to lower our risk profile and create capacity for greater investment in our existing residents’ homes, to ensure their ongoing safety, comfort and environmental performance.”