The ability to cope with rapidly rising construction costs amid a need to invest in existing stock is a key part of the rationale for the proposed 77,000-home merger between G15 associations Optivo and Southern Housing Group, the likely boss of the combined organisation has said.

Paul Hackett, currently chief executive of Optivo, said the two social landlords’ boards had both approved an outline business case for the merger in the last few days on the basis it will give them “an ability to thrive a much more uncertain environment” over the next few years.

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