Hercules Property Services is set to buy FMW Group, which owns UK property insurance broker FARR, for about £22m.

Following the sale, a company controlled by some of the vendors will buy back Corporate Risks, a division of FMW subsidiary FIIB, for £3m.

Chelmsford-based FARR offers insurance services to the UK housing association and registered social landlord (RSL) market. There are about 1,400 RSLs in England, ranging from small housing associations to those controlling more than 40,000 homes.

Hercules chairman Larry Lipman said the RSL sector was growing as the government announced higher rates to encourage development.

He said Hercules would also benefit from FMW's experienced management team and a strengthened salesforce.

"This acquisition will make Hercules one of the dominant players in this niche of the UK property insurance market," he said.

"It will substantially increase the property assets insured by the group and enable us to gain a strong foothold in the fast-growing housing association sector."