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Cosmopolitan Housing Group, which owns nearly 14,000 properties in north-west England, has begun merger talks with one of the country鈥檚 largest social landlords in a move that puts its development pipeline in doubt.

Cosmopolitan said it had begun merger talks with Riverside Group in what, if successful, would be Cosmopolitan鈥檚 second merger in a year after it merged with the Chester & District Housing Trust last year in a bid to strengthen its financial position.

鈥淐osmopolitan has experienced significant challenges and reduced its development programme during the summer,鈥� the group said. 鈥淭he Board of Cosmopolitan has approached Riverside to see if they could help them improve delivery to the communities they serve, leveraging Riverside鈥檚 financial strength and experience in managing group structures.鈥�

Cosmopolitan recently slashed its construction programme by a third and made 22 development staff redundant, with chief executive John Denny saying that it would need the  鈥渟helter of a bigger group鈥� to continue its development programme.

Cosmopolitan is to receive 拢13.3m of government funding to finance the construction of 699 homes over the next three years.

Riverside chief executive Carol Matthews told the Financial Times it was too early to say whether Cosmopolitan鈥檚 remaining development programme would continue if it joined her organisation.  鈥淲e have just started the due diligence, we are not in a position to make a full assessment [of Cosmopolitan鈥檚 financial position],鈥� she said.