THREE North-East landlords plane to merge into one of the largest businesses in the region.

Isos Housing and group partner Cestria Community Housing are finalising a merger with Derwentside Homes.

The combined organisation will be one of the top three housing associations in the region, with more than 23,000 homes.

Having secured conditional approval from their regulator, the Homes & Communities Agency (HCA), the landlords will start trading as one organisation in April.

In total, the three landlords already own and manage more than 23,500 homes across the North- East and together they would generate turnover of more than £114m per annum.

The group plans to work together to increase their development capacity.

The new business calculates that the proposed merger, under one organisation with a new brand, would deliver minimum net savings of £3m per annum from the fourth year of the new organisation operating.

Group chief executive of Isos Housing Group Paul Fiddaman said: “We believe that this move will establish us as a strong regional organisation, positioning us as a natural partner for delivering housing solutions for the North-East region.

“This is a hugely exciting opportunity. It is clear that we are like-minded organisations, with a great deal in common and many complementary strengths.

“Coming together will further raise our presence and profile, building on the successful partnership between Isos and Cestria.”

Combining the recent HCA grant allocations for Isos, Cestria and Derwentside would enable the group to manage one of the largest allocations of any landlord nationwide.

Up to more than £42m of HCA funding would enable the building of more than 1,350 homes in the next five years.

Chief executive of Derwentside Homes Geraldine Kay said: “Derwentside Homes were keen to select a partner that shared our ambitions to co-create a new and exciting future.

“Together with Isos Housing Group, we will be much stronger to not only weather the many challenges ahead, but to seize new opportunities so that we continue to deliver innovative housing solutions and services and build on our collective success.”

The merger talks have taken place over several months, followed by a period of consultation with all the landlords’ residents.

All parties have made rigorous legal and financial checks before confirming their commitment to the merger process.

Each association also needs to hold a Special General Meeting before the end of February, to seek the formal approval of their shareholders.

A name for the new organisation is being chosen and will be announced within weeks.