L&Q, The Hyde Group and East Thames have entered into merger talks with a view to creating 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.
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 as well as better and easier access to services for residents, delivering these through a new regional structure to ensure continued local accountability.
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 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.
Through the expertise that East Thames brings, a large care and support subsidiary will be created taking in supported housing from all three partners and investing in a new offer for vulnerable and older people, catering for London’s ageing population. In addition, the new organisation will set aside £250 million over and above current spending levels for community investment, funding likeminded 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, 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.”
Elaine Bailey, Chief Executive of The Hyde Group said “The combined strength of all three associations means that we will be able to deliver a house building programme that would have been impossible to achieve for each organisation alone. As well as this, we want to lead the sector in customer service, meeting the service aspirations of all our residents across a range of housing tenures. Put simply, we are stronger together – more financially capable of delivering and managing our stock than we are apart. Every penny that we make will be invested back into the services we deliver and into building much needed homes."
Yvonne Arrowsmith, Chief Executive of East Thames, added “We know there is a high demand for affordable housing amongst the communities we work with as well as major opportunities for growth. Joining with L&Q and Hyde enables us to remain committed to these communities and to maximize our impact there. It also brings the opportunity to grow much needed care and support services for vulnerable or elderly residents, which can be expanded across L&Q and Hyde’s areas of operation, stretching as far as Hampshire and Sussex. We know that with the financial strength of all three combined organisations we can achieve so much more and are excited about what this will mean for our current residents, staff and the many partner organisations we currently work with.”
The new organization will aim to engage residents throughout the process and will be holding a special consultation event for involved residents form all three organisations early this summer.