After the financial uncertainty caused by COVID-19, mergers are in the spotlight once again.
The likes of GreenSquare Group Limited and Accord Housing Group Limited merged on 1 April 2021 and Catalyst Housing Limited merged with Peabody Trust on 1 April 2022.
Discussions of housing associations merging are becoming louder throughout the country. Operational and strategic challenges facing housing providers in the current climate are growing and the housing associations being forced to plan a resolution to these challenges. Many have come to the conclusion a merger is best suited – or at least worth discussing.
Housing providers are looking to take advantage of economies of scale, increase efficiencies and encourage administrative savings in the business. So the prospect of merging becomes significantly more attractive. Therefore, the merging of housing providers can be viewed as a strategy to combat recent and future challenges – and enable provision of better services to tenants.
But it is important to flag two things. First, mergers are not the only path to resolve the challenges providers are currently facing. Second, there is no guarantee a merger will flourish; it can result in the downgrading of governance ratings or an overly complicated governance structure.
These challenges have seen merger conversations collapsing, as demonstrated recently between Sanctuary and Southern Housing Group.
The merging of housing providers is far from an exact science, and the market clearly contains both enthusiastic supporters and sceptics. However, it is apparent merger discussions are increasing. We are likely to see more merger activity, as housing providers try to juggle numerous requirements, whether meeting the demands of government, providing the best service to tenants, or trying to adapt to the ever-changing climate of the housing market.
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