Giant association deleverages as it eyes 50% cut in capital expenditure by 2026
L&Q’s completions have fallen by more than a third in the first half of the year.
The 109,000-home housing association, in a trading update for the six months to 30 September, announced it has completed 1,350 new homes in 2023/24 so far.
This is down on the 2,151 homes completed in the same period last year and is a consequence of L&Q’s decision to cut development from around 4,000 homes to 3,000 homes a year to manage risk and divert spend to existing stock.
Waqar Ahmed, said L&Q is looking to lower its capital expenditure by 50% by 2026. Its gross capital expenditure for the year is now expected to fall from £850m to £725m as part of its “deleveraging plans”
Ahmed said: “This means that risk within the development pipeline, including inflation, has already been substantially absorbed.
“While the outright sales market remains subdued, our exposure continues to decline. We remain confident in the shared ownership market that is competitive, well-positioned and resilient despite the ongoing uncertainty in the housing market.”
L&Q is planning to invest £3bn in a programme of major works to improve the quality of existing homes. It invested £156m in maintenance in the first half of the year, up from £149m last year.
Ahmed said the maintenance programme “continues to deliver major internal and external works inclusive of measures to address damp and mould, fire safety, energy efficiency and wide-ranging estate improvements.”
L&Q’s half-year operating surplus, which excludes certain one-off costs, fell from £172m to £158m.