CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Circle Housing and Affinity Sutton in merger talks

Article By: ,  Financial Analyst
July 27, 2015 10:36 AM

In a move sparked by chancellor George Osborne's controversial rent-reducing budget, two social housing firms, Circle Housing and Affinity Sutton have started merger talks.

If the companies go through with the deal, it would result in the creation of Europe's largest housing association. Circle currently manages 70,000 properties across the UK, while Affinity has a portfolio of 57,000, providing homes for almost half a million people.

A statement, which was posted on both companies' websites explained: "Two of the UK's largest housing associations are in the early stages of discussions about the potential to merge, and we are examining if consolidation will enable them to build more new homes and provide greater investment in local communities."

According to the statement, a merger could help deal with the shortage of new housing and would mean the companies could work more efficiently  in order to manage the "impact of government reforms".

Drop in social housing rent

The chancellor's summer budget included an announcement that rents in social housing would be reduced by one per cent for each of the four years from 2016. 

Explaining the difficulty of meeting this new requirement, the CEO of Affinity Sutton, Keith Exford, said there were "few effective routes to providing the social and affordable homes at the scale so desperately needed."

He said that both businesses are reviewing their business plans to find a way to deal with the reduction in rental income.

"As part of this we are also jointly exploring if we could raise significantly more capital together, allowing us to fund a greater building programme than we could if we stay apart," he explained.

Mark Rogers from Circle agreed. "Housing associations have a duty to address this issue, but the squeeze on government funding has made it difficult for our sector to find the cash to do so," he said.

He also noted that all discussions are still in their early days. "We passionately believe that the sector needs to transform and this is one potential way to make that step change."

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024