Two lease-based providers of supported housing have been found non-compliant on multiple counts by the regulator.
Hilldale Housing Association and Pivotal Housing Association have both breached the Regulator of Social Housing’s (RSH) standards on governance, financial viability and rent standards.
News of an investigation into the two associations emerged a month ago.
It follows numerous other investigations and downgrades of other lease-based supported housing providers as the regulator has stepped up its scrutiny of the sub-sector.
The regulator concluded that Wigan-based Hilldale, which manages around 800 units, had not demonstrated that it is “managing its resources effectively to ensure its viability is maintained, and that social housing assets are not being put at risk”.
The regulator added: “[Hilldale] is unable to provide adequate assurance that the accommodation it provides meets the government’s definition of specialised supported housing (SSH) and therefore that it is exempt from the rent standard.”
However, the regulator noted that after appointing a new board, Hilldale has “started to improve its governance”.
Hilldale is a lessee of two social housing real estate investment trusts (REITs) operating in the sector, Triple Point and Civitas. According to Triple Point’s last full-year results, Hilldale was its third-biggest approved provider by unit size.
The association accounts for 9.5 per cent of the REIT’s rent roll. In a stock exchange statement, Triple Point said: “All rent payable under the leases with the group continues to be paid in full.”
Hilldale accounts for 0.97 per cent of Civitas’ rent roll. All Hilldale’s lease payments to Civitas remain up to date, the REIT said in a filing, and it expects this to continue.
In a statement, Hilldale’s chair James Boyd, said: “Hilldale Housing Association is committed to working with the regulator to address the historical issues identified and move the organisation to a compliant position as soon as possible.”
He added: “I am confident that the new team at Hilldale supported by the group will work quickly to implement the improvements identified so we can continue to find and provide a range of housing solutions for those that need support to live independently.”
The RSH concluded that Pivotal had “not been able to demonstrate that it has managed its affairs with an appropriate degree of skill, independence, diligence, effectiveness, prudence and foresight”.
It added: “[Pivotal] is unable to provide adequate assurance that the accommodation it provides meets the government’s definition of temporary social housing or specialised supported housing and therefore that it is exempt from the rent standard.”
But the regulator noted that the Bournemouth-based association has “taken steps to improve its governance and is committed to working with the regulator to address the issues outlined”.
The group, which currently provides around 450 homes to vulnerable people across Cornwall, Gloucester and Dorset, is also a lessee of Triple Point and Civitas.
Civitas said that Pivotal represents 3.96 per cent of its rent roll and remains “fully up to date” with its lease payments, and this is expected to continue.
At Triple Point, Pivotal accounts for 0.7 per cent of its rent roll. The REIT said all rent due from Pivotal “continues to be paid in full”.
In a statement, Pivotal’s chair Derek Street said: “Whilst it is disappointing, it is of no surprise, as we identified some historic issues as a new board and executive 18 months ago, which needed addressing.
“We have implemented a series of improvements in those 18 months but we recognise there is still more work to do. We welcome the closer regulatory engagement and the opportunity to further strengthen the housing association, which we are confident we will achieve.”
The judgements came the day before the government announced that it is extending and offering extra funds to four pilot schemes aiming to boost standards in the supported housing sector.
James Boyd, Hilldale’s chair, comment in full
“Hilldale Housing Association is committed to working with the regulator to address the historical issues identified and move the organisation to a compliant position as soon as possible.
“Since the appointment of the new board in September last year we have been identifying areas of non-compliance and working with the recently appointed executive to put in place clear, targeted, and resourced plans to strengthen the business and our offer to tenants.
“In November last year Hilldale joined the Change Housing group providing us with increased financial stability and strategic support in key areas such as finance, governance and asset management.
“I am confident that the new team at Hilldale supported by the group will work quickly to implement the improvements identified so we can continue to find and provide a range of housing solutions for those that need support to live independently.”