Sovereign and Network Homes enter merger talks to create 82,000-home landlord

Subject to a formal appointment process, Sovereign’s chief executive Mark Washer would become the chief executive of the new group and Helen Evans, currently chief executive of Network Homes, will become deputy chief executive.

Sovereign’s chair Paul Massara would become chair of Sovereign Network Group. Jon Gooding, interim chair of Network Homes, will become deputy chair. 

Sovereign Network Group will have an annual income of more than £830m in 2024-25, the groups said. 

Sovereign and Network said the combined group will invest £9.2bn over the next 10 years, building 25,000 new homes, almost 4,000 more than in current plans, as well as regenerating estates and improving the quality of existing homes.

They have also pledged to establish a new Community Foundation to invest £100m in communities over a 10-year period.

The groups said that together they will be “well-placed to weather the economic storms and to continue to invest in building safety, technology to improve customer experience and decarbonisation”.

Mr Washer said: “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.

“We want to merge because we share the same vision: providing our current and future customers with more, better-quality homes in thriving communities, to offer sector-leading services, and create a real catalyst for positive change.”

He added: “The headwinds we face in housing now – and there are more coming – make it even more urgent that we should be bold and innovative. Sovereign Network will be well placed to embrace that change and shape the future of the sector.

Ms Evans said: “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.”

She added: “This is an important new chapter for Network Homes and I know that it will deliver benefits to residents, our people and help us to better fulfil our mission to provide safe, secure and affordable homes for as many people as possible.”

Network saw its group surplus drop 77 per cent to £9.6m in its last reported full year to March 2022. The fall in surplus was due to lower property sales and an impairment provision of £15.7m on a development scheme in Southall, west London, the group said. Network Homes has regulatory grades of G1/V2. 

In its last full year to March 2022, Sovereign reported an 11 per cent rise in surplus, partly helped by staircasing on shared ownership properties. 

However, last November Sovereign was among a wave of housing associations downgraded to V2 over the challenges facing the sector.

In June this year, the regulator also downgraded the landlord to a G2 rating for governance over concerns about its data on health and safety compliance.

It came five months after Sovereign breached the Home Standard over failure to meet statutory fire, electrical and asbestos standards in communal areas.