But debt ratio also falls after £1bn sale of PRS business
L&Q has reported a first quarter drop in turnover, surplus and completions, but saw its debt position improve after a major sale.
In a trading update for the three months to 30 June 2026, published on Friday, the housing association reported turnover of £241m, down from £271m in the equivalent period the previous year.
The 110,000-home provider’s EBITDA figure, a measure of surplus, was £90m, down from £140m, while its operating surplus was £70m, down from £120m.
Completions also fell from 563 to 301 new homes. L&Q has a strategic objective to build roughly 8,500 new homes by 2031, half of which for affordable tenures.
Commenting on the results, Ed Farnsworth, group director for finance, focused on the “major strategic milestone” that occurred during the period.
This was the sale of Metra Living, which had been L&Q’s private rented sector business, to an investment fund managed by Morgan Stanley Real Estate Investing in partnership with Ridgeback.
The deal, worth just over £1bn, was completed in June 2026.
As well as having an immediate impact on net debt, Farnsworth noted that it would “will significantly reduce future interest costs”.
L&Q saw its balance sheet strengthen in the Q1 figures, with debt-to-assets reducing from 41% at 31 March 2026 to 36% at the end of the quarter.
The provider recorded a one-off accounting loss on disposal of £233m in relation to the sale, but Farnsworth stressed that “the longer term positive financial impact it unlocks represents a positive net benefit to the business.”
Housing Today first revealed L&Q was exploring the sale of the PRS business and strategic land function back in May 2024.
Its land business, L&Q Estates, was sold to Urban & Civic in July of that year with the PRS business later put up for sale too.
Together with the transfer of more than 10,000 homes located outside its core geographies, the sales form part of a strategy to simplify L&Q and focus it on its core purpose as a housing provider.
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