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Large housing associations announce merger plans to create 82,000-home giant
Two large housing associations have announced plans to merge to create an 82,000-home giant.
Sovereign, which currently manages 61,000 homes, and Network, which manages 21,000, have announced their intention to merge today, following agreement by their respective boards last Thursday. They intend to complete the deal by 1 October.
The new organisation, Sovereign Network Group, will be one of the largest housing associations in the UK, with over 82,000 homes across the South of England and in London.
Subject to a formal appointment process, it is expected that Mark Washer, the chief executive of Sovereign, will become the chief executive and Helen Evans, the chief executive of Network Homes, will become deputy chief executive.
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Paul Massara, the chair of Sovereign, will become chair of the new landlord, while Jon Gooding, the interim chair at Network, will become deputy chair of the new landlord.
The combined group will have an annual income of more than £830m in 2024-25.
In an announcement this morning, the providers said they would invest £9.2bn over the next 10 years, building 25,000 new homes – almost 4,000 more than are currently planned.
They have also pledged to establish a new community foundation to invest £100m in communities over a 10-year period.
Rising costs and capped rents are creating a financially challenging period for the sector at the moment, with a rise in merger activity as a result.
Optivo and Southern joined forces to create a 77,000-home group; One Housing Group has joined Riverside to create a 75,000-home landlord; and Peabody and Catalyst merged into a 104,000-home group last April.
In the North West, Great Places and Mosscare St Vincent’s are in talks to create a 33,000-home landlord.
Meanwhile, 105,000-home Sanctuary has also completed a takeover of troubled 11,000-home Swan.
In their statement, Sovereign and Network Homes said they would be “well placed to weather the economic storms and to continue to invest in building safety, technology to improve customer experience and decarbonisation”.
It is proposed that the new organisation will initially take the form of a group structure. Sovereign will be the parent (renamed Sovereign Network Group) and Network Homes the subsidiary (renamed Sovereign Network Homes), with a view to full amalgamation in April 2025.
Mr Washer said: “This is a really exciting opportunity for both Sovereign and Network Homes. Together we can build more homes and invest more in the homes we own. As we merge, we will learn from one other, bringing the best from each organisation.
“As a housing association with over 80,000 homes and a really strong financial profile, we will be able to deliver more for all of our customers.”
Ms Evans added: “This is the right time for this merger, and the right merger for both Network Homes and Sovereign. Together our size and resilience as an organisation will increase our ability to invest and to build new, affordable homes.
“Our plans for a new community foundation, spending £100m over the next 10 years, will ring-fence our commitment to create places and communities where people can take control and improve their lives. And our people will also benefit, with new opportunities for learning and development.”
