Buyers hit by rising mortgage rates, housing association says
Housing association giant L&Q has reduced the number of homes it is building by nearly half in the first quarter of this year as it scales back development activity.
L&Q completed 701 new residential homes in the three months to 30 June, 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.
The firm’s finance director Waqar Ahmed said: “We continue to remain cautious noting prolonged cost inflation and increasing mortgage rates which is impacting buyer affordability.”
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.
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