Housing associations L&Q and the Hyde Group have agreed to abandon their merger plans after months of negotiations.

L&Q, Hyde Group and East Thames revealed in April that they were exploring a three-way merger. With Hyde pulling out, L&Q and East Thames will instead now continue to work towards a two-way merger.

In a statement, Hyde Group said: “As financially strong organisations, both housing associations remain committed to growth and have ambitious plans to build more homes to help alleviate the housing crisis in London and the South East.

“However, it has become apparent that there are practical issues surrounding the merger that cannot be overcome without disproportionate effort. In the current environment of unparalleled change and opportunity we have concluded that this would require time that we do not have.”

L&Q added: “Earlier this year L&Q, The Hyde Group and East Thames announced that the three housing associations were exploring a possible three-way merger. Since the announcement in April, the three organisations have been working closely together to understand each other’s businesses and plans. We wanted to be certain that we could achieve more together than we could alone.

“As a result of this work, L&Q and The Hyde Group have today mutually agreed to end our merger plans. L&Q and East Thames will instead work towards a two-way merger.”

In their statement in April, the three associations said that merger would deliver efficiency savings of £50 million a year within five years, primarily through combining central overheads.