Merger talks between L&Q, The Hyde Group and East Thames

Merger talks have begun between housing associations L&Q, The Hyde Group and East Thames that will see the creation of one of the country’s top four biggest house builders.

Once completed, the merger will allow the three companies to build 100,000 new homes across London and the South East, which is 35,000 more homes than they would have been able to build as separate entities and represents an investment of £25Bn over the next ten years.

The new organisation will be worth £30Bn and will also be responsible for managing 135,000 homes.

Of the 100,000 new homes, half will be for those on lower incomes. In total, 25,000 affordable new homes will be reserved for first time buyers and 25,000 new homes will be made available for affordable rent, with the remaining 50,000 new homes for market rent and sale.

The extra 35,000 new homes built as result of the merger represents an investment of £9Bn. Housing Minister Brandon Lewis welcomed the news, saying it would make a “real difference”. He commented: “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.”

It is envisaged that the merger will result in efficiency savings of £50M a year within five years through combining back office functions, investment in IT, flexible working, growth through development and combined purchasing power in procurement.

The merger will also see a new training academy with a £5M a year rise in investment in training budgets. This will see the creation of nationally accredited apprenticeship schemes plus provide the opportunities for career development for staff. Residents will also benefit from training and employment options within the community.

A large care and support subsidiary will be created that will include supported housing from all the three companies. An extra £250M investment will be allocated for delivering projects to improve communities within London and the South East.

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