Merger will give West Midlands its biggest association

West Midlands housing associations Keynote Housing Group and Prime Focus are set to merge in a move that would create the largest registered social landlord in the region.

The deal could create a housing association with about £1bn of assets and 31,000 homes throughout the East and West Midlands.

The two associations have entered into “exploratory talks” about a merger, which involves a joint research team exploring the business case for such a move. The team will report back to the boards of both associations in April this year.

The merged entity would employ more than 1200 staff and invest £120m each year in neighbourhoods in the region. It would have a combined turnover of £110m.

Tom Murtha, group chief executive at Keynote, said a merger would increase efficiency by cutting the procurement costs of the two associations.

He added that as a more powerful association, the new entity would be able to lobby for funding more effectively.

Murtha said: “The government tends to concentrate on the North and the South – the Midlands has generally received the lowest funding allocations.”

He added that the two associations had already worked closely on regeneration issues, as well as having worked as development partners.

He said: “There are many benefits in creating a powerful regional force in housing and regeneration that could bring significant benefits to all our customers and stakeholders.”

Richard Clark, group chief executive of Prime Focus, said: “We would be able to widen our services for tenants as well as providing them at lower cost. We would also reap the benefits of a much wider asset base.”

Murtha said redundancies were not being considered but he refused to rule them out.

He added that no decision had been made regarding who would head the merged organisation.

The deal is one of several mergers that could be completed this year. Merseyside-based Regenda Group and Lancashire-based Wyre Housing Association are also in merger talks. The merged association would have a combined turnover of about £40m and would manage more than 12,000 homes in Lancashire, Greater Manchester, Merseyside and Cheshire.

Circle 33 and Anglia, and Asra Greater London and Leicester Housing Association are just a few of the other associations planning mergers.