L&Q, the country’s largest developing housing association, will see its yearly housebuilding target of 10,000 homes a year slashed to just 3,000 homes as the landlord tries to cope with escalating fire safety costs.
The housing giant had long-standing ambitions to deliver 100,000 homes over a 10-year period – but in recent months has indicated it will be relaxing that target.
In an interview with Inside Housing, published today, chief executive Fiona Fletcher-Smith revealed that L&Q expects to deliver 3,000 homes a year over the next five years – less than a third of the level of its previous ambition. For context, that is a level that in 2019/20 would still have seen L&Q comfortably top Inside Housing’s survey of the biggest developing housing associations. It has built 9,985 homes – 5,430 of which were affordable – since 2016/17.
“We are probably going to keep along that level, aiming to possibly outperform it if we have got the spare money to subsidise,” she said. “And that will be for about five years.”
Ms Fletcher-Smith told Inside Housing that she expects L&Q to deliver “slightly less than 3,000 homes” in 2020/21.
Ms Fletcher-Smith stressed that the change in focus is directly because the landlord’s first priority is fire safety work on its existing blocks.
“We are doing it because there is a finite amount of money and we are prioritising the safety of our residents,” she said. “We have a number of tall buildings, we have a number of buildings below 18m that still require work, and we are prioritising that. The Decent Homes Standard and the new carbon neutrality standards that are to come, they matter to us and they matter to our residents, so that is our second priority.
“It is what is left then that we will be putting into our development programme.”
Ms Fletcher-Smith’s comments come shortly after housing secretary Robert Jenrick acknowledged the impact that the building safety crisis is likely to have on housebuilding.
He said that “there are choices within this, and that in itself will have consequences and that will make it harder for those housing associations to invest more in affordable and social housing and other important aims they and I share, like making those buildings more energy efficient. That’s the difficult situation we find ourselves in.”
Ms Fletcher-Smith said that L&Q is “talking to government and we are talking to the Greater London Authority and Homes England about grant rates”, but that the association realises that existing grant rates are not going to be adequate.
She added that there is a willingness to listen to that argument from all sectors of government and that L&Q will still try to maximise what it can do.
“But for the period of our next corporate plan, the five years, you will see us putting far more of the money we have available into our existing stock. It has just got to take priority.”