Sanctuary Group, which manages 100,000-home across the UK, announced to the stock market yesterday that its board has agreed to enter into due diligence and dialogue over a potential merger with the 30,000-home Southern Housing Group.

The statement said a full proposal for merging the businesses will be published in the summer.

Worcester-based Sanctuary has 13,500 staff and reported a turnover of £763 million in the year to March 2020 from the management of 103,000 homes, including through its Scottish arm Sanctuary Scotland, producing a surplus of £57.4m.

G15 landlord Southern Housing Group is based in London and employs 1,000 people, producing a surplus of £23m from turnover of £237m.

Were the two organisations to combine it would produce a landlord managing more than 130,000 homes, which would be bigger than Clarion, currently the largest registered provider, with around 125,000 homes.

In a statement Sanctuary said the firms’ early discussions “could lead to Sanctuary and Southern creating a new housing model, with a strong national infrastructure and a dedicated regional focus, to ensure high-quality, local services to residents”.

Sanctuary’s statement added that “a further announcement will be made when appropriate”.