Troubled Swan has told staff it is closing its two offsite factories as efforts to complete its delayed rescue merger with Sanctuary continue.

The stricken 11,000-home housing association has decided to close the loss-making facilities after last year breaching a regulatory standard when it lost control of development costs.

The housing association has now told staff in a letter that it would not be ‘financial sustainable’ to keep the factories open even after its deal with 105,000-home association Sanctuary.