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. 

L&Q

L&Q said completions were below the 1,000 figure in the first three months of its new financial 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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