Islington housing firm to merge with concerning Affinity Sutton group

An Islington-based housing company is considering a merger with another firm which was last year caught in a battle with residents over rent increases.

Circle Housing, which has an office based in Corsica Street and manages up to 3,331 homes in the borough, has been in talks with Affinity Sutton over a merger in response to the one per cent cut to social housing rents announced in the Conservative budget earlier in the month.

The government rent cuts will hit landlords across the UK – including Circle Housing and Affinity Sutton – to the value of £2.5bn, the Institute of Fiscal Studies has estimated, which will force many housing firms to recoup the costs of the shortfall elsewhere – which has included raising rents.

If the discussions with Affinity Sutton, which manages 200 properties in Islington, are successful, this would create one of Europe’s largest housing associations with almost 127,000 properties between the two companies nationally.

But concerns have been raised over the previous records of both Circle Housing and Affinity Sutton and the impact this could have on Islington residents living in social housing.

Last year, there were fears Affinity Sutton would raise rents of those living in Sutton Dwellings in Upper Street but, following a long campaign by the tenants and backed by Islington South and Finsbury MP Emily Thornberry, the housing association denied it was looking at rent increases.

In March, Circle Housing also came under fire from Islington Council over the quality of work and response times of their repair contractors.

In a joint statement by the two companies, Keith Exford, CEO of Affinity Sutton said: “In the light of the significant reduction in our rental income announced in the budget, both organisations are reviewing their business plans. As part of this we are also jointly exploring if we could raise significantly more capital together, allowing us to fund a far greater building programme than we could if we stay apart.”

Emily Thornberry, MP for Islington South and Finsbury said that it would be necessary to keep a “close eye” on the two companies, whose primary challenges remained providing “affordable housing and repairs performed to a decent quality and in good time.”

Former Islington councillor, Circle 33 board member and tenant, Terry Stacy, said: “Both organisations are working in a ever changing environment, and following the recent budget they need to look at all options open to them to continue to provide quality services to residents and continue to build the much needed homes we need.”