Three major housing associations in merger talks

Three major London-based housing associations have announced this morning they are in merger talks.If the merger goes ahead, between L&Q, The Hyde Group and East Thames it will create one of the country’s top four largest house builders.

Together, the three organisations will be able to build 100,000 new homes across London and the South East - 35,000 more homes than they could have achieved alone, representing an investment of £25 billion over the next ten years.

Half of these new homes will be for people on lower incomes, making the new organisation the largest provider of affordable homes in the country. In total, 25,000 affordable new homes will be set aside for first time buyers and 25,000 new homes will be for affordable rent, with the remaining 50,000 new homes for market rent and sale.

The 35,000 additional new homes built as a result of this proposed merger represents an investment of £9bn and is welcomed today by the Housing Minister, Brandon Lewis MP who said: “This shows what can be achieved by combining the strengths of each organisation. It will make a real difference to increase their capacity to build, house and help thousands of people across London and the South East. I welcome the added focus on helping our ageing population and the launch of a training academy for staff and residents. In my mind, this is exactly what housing associations should be doing”.

The proposed merger of three of the nation’s leading housing associations is a positive step for the sector. In addition to building 100,000 new homes, the new organisation will also be responsible for managing 135,000 homes.

The new organisation, worth an estimated £30bn, will continue to provide good quality homes 

The merger will also see the creation of a new training academy with a £5 million a year increase in investment over existing training budgets. This will provide nationally accredited apprenticeship schemes, greater career development opportunities for staff and training and employment options for residents in the communities they serve.

As a result of the merger, L&Q, The Hyde Group and East Thames say will be able to deliver efficiency savings of £50 million a year within five years, primarily through combining back office functions, investment in IT, flexible working, growth through development and combined purchasing power in procurement. The new organisation aims to be innovative and agile, responding to Government’s criticism of the sector head on.

David Montague is the CEO designate of the new merged organisation and Elaine Bailey is deputy CEO designate. Yvonne Arrowsmith will continue as CEO of East Thames which will become a subsidiary of the new organisation. The Chair designate will be Aubrey Adams and the deputy Chair designate will be Mark Sebba.

Commenting on the proposed merger, David Montague, Chief Executive of L&Q, said:

“Our plans will allow us to tackle the housing crisis head on, driving greater efficiency, building more homes, creating beautiful new places and sustainable, independent communities. At the heart of our united mission will be the continued provision of affordable homes for those in need.”.