Housing association giant L&Q records lowest annual completion numbers for a decade

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Housing association remains biggest builder in sector despite pivot towards repair and maintenance

The 2,316 new homes completed by L&Q in its most recent financial year was its lowest level of development for a decade.

L&Q

L&Q’s offices in Stratford, east London

In its audited financial statements for the year to 31 March 2025, the housing association reported completion figures 22% down on the 2,955 new homes it completed in 2024, and even further down on its 2022 peak of 4,157.

Despite recording its lowest level of delivery since 2014/15, when it completed 2,031 new homes, the provider looks to have remained the housing association sector’s biggest builder for the sixth year running based on annual financial statements published this year to date.

The number of homes started in the period also fell from 813 to 519.

L&Q houses roughly 250,000 people, primarily around Greater London and Greater Manchester. The housing association once aimed to build 10,000 homes a year, but in recent years it has scaled back this ambition as it pivoted to focus on investment in its existing stock.

Ed Farnsworth, executive group director for finance, said: “L&Q has a clear strategy to simplify our business, prioritise L&Q’s core purpose as a social housing provider, and generate additional financial capacity to invest in new and existing affordable housing.

“Residents are at the heart of those priorities, and this positive set of financial results are testament to that, highlighting record levels of investment in homes and services, and also demonstrating continued improvements in our operational performance, supported by the impact of our organisational transformation plans.

L&Q invested £371m in maintenance in the year, the third of its £3bn, 15-year Major Works Investment Programme. This figure was up 14% from £326m the year prior.

Farnsworth said that while “wider economic uncertainty remains”, this was “a period of significant opportunity for L&Q”, given the government’s support for the sector.

L&Q recorded turnover of £1.11bn, down £11m from £1.12bn.

The vast majority (70%) of turnover was generated from core social housing lettings, with a further 18% coming from market sales activity.

This was a drop from 27% in the year prior, which was “a result of a strategic decision to slow down development activities and reduce exposure to more volatile sales market activities”.

Operating surplus was £377m, up from £333m. All of the increase in operating surplus was driven by social housing activities, with non-social housing activities suffering a £17m loss due to downward valuation of investment property and impairment costs relating to development schemes (£24m).

The provider’s operating surplus figure was substantially adjusted from the provisional estimate of £431m given for the year in an unaudited trading update at the end of Q4.

No provision was made for impairment in that trading update, but guidance had been given it would be in the range of £20m to £40m. In a statement to investors, L&Q set out nine separate adjustments made following the completion of the audit.

The most significant of these were non-sale operating costs being £39m higher and negative changes in the value of investment property being £15m higher than previously expected. There was also a £10m loss from joint ventures that was not recorded in the unaudited figures. These were partially offset by a £12m increase in other income.

Updated figures

Several of L&Q’s metrics have changed in their final audited accounts compared to an unaudited update earlier in the year

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The changes had a knock-on effect for the overall surplus for the year, which stood at £33m compared with the previously estimated £88m.

Either way, this would have been a drop on the £117m recorded the year prior, with the figure hit by a £120m loss on disposal of the L&Q Estates group of entities to Urban & Civic.

Surplus for the year before taking the disposal into consideration was £153m, up from £117m.

EBITDA MRI interest cover was 156%, up from 142%, while net debt stayed level at £5.4bn.

In the chair’s statement, Liam Coleman, said: “the long-term certainty and support provided by the government means that we can look to the future with renewed optimism”.

He noted that 70% of the organisation’s repairs were now delivered in house and said the organisation was looking to increase that to 80% over the next 12 months.

Coleman added that the organisation was “well placed” to respond to Awaab’s Law, which will be phased in from October, having already fitted 19,000 humidity sensors and strengthened technical teams.

L&Q’s provisions dropped from £91m to £71m over the course of the year, with its £23m increase in provision more than compensated for by a £43m release.

Coleman said the provider expected to have either completed or begun remediation on all its 18m+ buildings by the end of March 2026.

More 2024/25 housing association financial statements

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Peabody surplus drops 18% as maintenance spend rises Full accounts published for 109,000-home landlord

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Stonewater reports ‘strong’ financial results on back of £35m rise in rental income But landlord’s surplus falls to £12m

Midland Heart sees surplus soar £25m The Birmingham-based landlord said the increase was a one-off from divestments of its retirement homes

Turnover up but surplus down at Moat Provider also increases new home completions

Paradigm’s annual completions down 21% but still on track to meet targets Buckinghamshire-based housing association says new build “central part” of mission as it increases surplus and turnover

Vivid builds more than 1,500 homes for the second successive year Hampshire landlord increases surplus and turnover

Shared ownership income drops at Bromford Flagship Newly merged 80,000-home landlord confirms turnover and surplus increase in audited figures

Record turnover at Clarion but surplus drops and completion targets missed Housing association will seek to recover costs from third parties as remediation provisions and contractor failure blunt surpluses

Sanctuary meets development target but sales drop 125,000-home housing association says a number of investors are interested in buying its student housing portfolio

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Housing association giant L&Q records lowest annual completion numbers for a decade

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