London social landlords L&Q, Hyde Group and East Thames to merge to become UK top four housebuilder
The proposed merger of three of the capital’s largest housing associations has been announced in a move which would create one of the UK’s top four housebuilders.
London & Quadrant Housing Trust (L&Q), the Hyde Group and East Thames have entered into merger talks with a view to building around 10,000 homes a year, placing this £30 billion new social housing giant below only Barratt, Persimmon and Taylor Wimpey in the country’s housebuilder league table.
The plan has been welcomed by housing minister Brandon Lewis, who said the ‘combined strength’ of the three organisations would ‘make a real difference to increase their capacity to build, house and help thousands of people across London and the South East’.
In a statement, the housing associations said that over 10 years, they would be able to build 35,000 more homes than they could have achieved alone, representing an investment of £25 billion over the coming decade.
The statement continued: ‘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.’
Responding to the government’s drive to make housing associations more streamlined, productive and focused on ‘starter homes’ for sale, the statement added that the new organisation aimed to be ’innovative and agile, responding to the government’s criticism of the sector head on.’
The proposed chief executive of the new outfit is David Montague, currently chief executive of L&Q while his proposed deputy is Elaine Bailey, currently chief executive of Hyde.
Yvonne Arrowsmith will continue as chief executive of East Thames which will become a subsidiary of the new organisation.
Montague 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.’
As a result of the merger, L&Q, The Hyde Group and East Thames anticipate efficiency savings of £50 million a year within five years, primarily through combining back office functions as well as ‘investment in IT, flexible working, growth through development and combined purchasing power in procurement.’
The new organisation will also create a large care and support subsidiary in what it called a ‘new offer for vulnerable and older people’.
A consultation event for all involved residents from the three housing associations will be held early this summer.