Morgan Sindall has said 42 of Connaught’s estimated 100 social housing deals have been transferred to the company since it bought it for £28m this month.

In a statement to the City, it said: “We have made good progress with clients, and are pleased to announce that agreements in principle have been reached with 42 local authority and housing association clients for the transfer of their contracts to our social housing arm Lovell. Discussions are continuing with a number of other clients, which are yet to agree to the transfer of their contracts.”

There had been doubt that some councils would transfer deals to Morgan Sindall after advice from lawyers that they would have to be retendered through the Official Journal after Connaught’s collapse.