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L&Q to sell homes to small associations at cost in £100m programme
London’s largest housing association will sell homes it builds on small sites to other associations at cost value under its new small sites programme, its finance director has told Inside Housing.
Waqar Ahmed, finance director at L&Q, said staff at the large association would do all the procurement and development work and then sell the homes to a pool of small housing associations at net cost value.
This is part of a £100m initiative launched by L&Q aimed at unlocking sites of 50 units or less around London.
It has formed a strategic partnership with nine small associations initially – the BME (black and minority ethnic) London group – but is keen to expand this to as many other small housing associations as are interested.
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These partners are: Inquilab HA, Westway HA, Tamil Community HA, Imani Housing Co-op, North London Muslim HA, Odu-Dua HA, Ekaya HA, Shian HA and Industrial Dwellings Society.
L&Q Foundation, the association’s charitable arm, will put in the £100m, which will be combined with grant funding from City Hall to ensure that 100% of the homes built under the programme are affordable.
The partner housing associations will agree sites and projects with L&Q before work starts, with Mr Ahmed anticipating that most sites will see between 10 and 20 homes built.
Once the homes are completed by L&Q’s newly created ‘strategic partnerships’ team, which, Mr Ahmed said, would apply all of L&Q’s usual due diligence, they will be sold at cost value to a partner housing association.
This means the money is recycled back into the £100m fund and can be used to unlock more small sites.
Mr Ahmed told Inside Housing: “All [our partners] need to do is be prepared to have the long-term finance available at the point of completion.
“On that, I’ve had a few conversations with funds, banks and some other funders that are interested in that space. But [the associations will] have to do that themselves.”
Gina Amoh, chief executive of Inquilab Housing Association said: “Collaboration with a larger partner will help smaller HAs achieve economies of scale, ensure better risk management and realise value for money.
“We want this to be a flagship example of how larger HAs and the GLA can help support smaller HAs to develop and help increase supply of affordable housing.”
