Proposed organisation would invest £25bn, making it one of industry’s biggest clients
Three housing associations are in merger talks to form an organisation worth £30bn.
L&Q, The Hyde Group and East Thames – some of London’s largest housing associations – plan to combine forces to build 100,000 homes over 10 years across London and the South-east.
The housing associations are aiming to create one of the country’s top four housebuilders by merging, and will be able to build 35,000 more homes than they could build alone.
Half of the 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 plans represent a total of investment of £25bn over the next decade.
While in addition to building 100,000 homes, the new organisation will also be responsible for managing another 135,000 homes.
The merger will also see the creation of a new training academy with a £5m a year increase in investment over existing training budgets.
It will provide nationally accredited apprenticeship schemes, as well as career development opportunities for the organisation’s staff, and training and employment options for local residents.
As a result of the merger, the three housing associations say they will be able to deliver “efficiency savings” of £50ma year within five years.
This would be done primarily through combining back office functions, investment in IT, flexible working, growth through development and combined purchasing power in procurement.
The new organisation will also set aside £250m above current spending levels for community investment, funding charities and groups to deliver projects which “make London and the South East a better place to live.”
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, housing minister Brandon Lewis 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”.