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L&Q eyes further development outside London
L&Q’s landmark deal with a Manchester housing association is a “pilot” to test a model which could allow the London landlord to develop in other cities.
David Montague, chief executive of the 70,000-home organisation, said the deal is a “first small step” in plans to build more homes in growth areas outside L&Q’s traditional London base.
L&Q unveiled a £160m joint venture with Trafford Housing Trust to build 2,000 homes in Greater Manchester and the North West over four years last week.
Mr Montague said if the deal works well, L&Q is willing to grow its investment in the venture and strike other deals with landlords based in other regional cities.
He told Inside Housing: “For 53 years, L&Q has been based in London and the South East. During that time we have thought regularly about expanding our boundaries, but every time we have decided against it.
“What is different this time is we have got this emerging story around power cities taking responsibility for their own future and doing their best to secure investment.
“Two thousand homes is big enough to test the concept but not big enough to cause us to fail if it goes wrong, and if at the end we like it we will do more.”
He said the model was “very much L&Q investing in Trafford”, but the 9,000-home organisation may tap into L&Q’s land assembly experience and expertise if it needs to.
Both parties have invested £80m of equity into the joint venture, which will raise debt to support the development.
It will build 1,000 homes for market rent and sale, 500 for affordable rent and 500 for affordable purchase by first-time buyers – a tenure split which reflects L&Q’s overall pipeline.
Mr Montague said the landlord has an ambition to build 100,000 homes over 10 years, but recognises it will not be able to do all of this work in London and the South East.
He did not put a figure on how much building work it is targeting elsewhere, saying it wanted to assess the success of the scheme with Trafford first.
Discussing London landlord Hyde’s decision to pull out of a high-profile mega-merger last week, Mr Montague said the organisation is not actively seeking a new merger partner to replace Hyde.
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