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L&Q increases fire safety spend by 50% as new home starts fall sharply
L&Q’s spending on fire safety measures rose by 54% in the past year while it suffered a significant decline in new home starts, its annual accounts show.
The 110,000-home landlord’s annual fire safety spend increased from £24m at March 2019 to £37m at March 2020, as part of a £225m total investment in existing homes, which was down slightly from £241m the previous year.
New home starts fell by 38.6% from 6,428 in 2019 to 3,945 in 2020, but L&Q said its “aspiration remains” to deliver 10,000 starts per annum over the next 10 years.
In a recent interview with Inside Housing, group finance director Waqar Ahmed suggested this could be through joint ventures with councils, banks and other associations.
Despite the decline in starts, L&Q noted that its development output remains higher than that of its G15 peers.
L&Q said completions were behind target partly as a result of “delays experienced on a small number of schemes, where we focused on ensuring build quality ahead of meeting handover targets.”
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The London-based association now has an approved development pipeline of 29,504, at least half of which will be for social housing, with a target of 60% in London.
L&Q’s turnover fell from £937m to £915m between 2018/19 and 2019/20, while its underlying surplus fell from £202m to £179m.
The association’s full surplus more than doubled to £414m, but this total includes £235m from the acquisition of Trafford Housing Trust, which was completed in October 2019.
Mr Ahmed said: “L&Q was operating in an extremely challenging and uncertain environment even before the onset of coronavirus.
“The true scale of vital fire safety and building remediation works was becoming clear, while the housing market remained subdued, in part due to the political stalemate over Brexit.”
He added that L&Q’s decision to pause new development projects in September 2019 has paid off.
“The expected stabilisation in our finances by year-end gave us a firm platform to continue delivering vital services throughout the pandemic, and a springboard for the future,” he said.
