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Equity-linked association breaches three regulatory standards
A supported housing association linked to private investment funds has breached three consumer standards, including one over safety issues, the English regulator has said.
In a notice published today on Westmoreland Supported Housing Association, which provides homes to adults with learning and physical disabilities, the Regulator of Social Housing said that it had found some of the association’s homes to be in disrepair, cold and lacking in basic utilities.
It also said that previously, “large numbers of gas safety checks and fire risk assessments were overdue”, while Westmoreland had provided inconsistent information on health and safety, resulting in a breach of the Home Standard.
It also breached two further standards over its treatment of tenants.
In November last year, the regulator declared Westmoreland non-compliant with its standards on governance and viability, a measure it has taken with five other housing associations with similar business models.
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These associations lease specialised supported housing (SSH) from investment funds on a long-term basis, making monthly, index-linked payments to those funds. The regulator has said it is “hard to see” how any association operating such a model could comply with its standards.
In its original judgement from the regulator, Westmoreland was criticised for its handling of a set of evictions, understood to be from a number of homes in Gloucester owned by fund Henley Social Investments.
Inside Housing reported in September last year that the tenants expressed concerns when they were served with eviction notices, saying they would be made homeless if forced to move out.
At the time, Westmoreland said it had offered extended notice periods in some cases.
The regulator’s latest judgement said Westmoreland “failed to consult with tenants, failed to provide appropriate advice and assistance and failed to consider what would happen to tenants during and after the notice period”.
According to the judgement, some tenants moved out of the homes and when the regulator asked Westmoreland what had happened to them, they “could not be traced”.
The regulator said that Westmoreland “failed to properly take the needs of these potentially vulnerable adults into account” and that it “has risked serious detriment to tenants in this case”.
Because of this, Westmoreland has also breached the Tenancy Standard and the Tenant Involvement and Empowerment Standard.
Earlier this month, Inside Housing revealed that Westmoreland is being accused by Gloucester City Council of not providing sufficient care to 15 of its residents, something it denies.
In a statement in response to the regulatory notice today, a Westmoreland spokesperson said: “We have already implemented a plan of action which we are confident addresses and remedies the points raised in the judgement. We are also confident that the issues are specific to one small portfolio.
“Having newly appointed an experienced chairman, board members and chief executive for Westmoreland the issues raised in both this and the previous judgement are being addressed so that Westmoreland will be able to demonstrate that it is a strong, well-governed and successful organisation.”
Real estate investment trust Civitas leases 109 properties with 624 tenants to Westmoreland as of December last year.
It said in an update to the stock market that the judgement “relates to properties which are not owned by Civitas, but other landlords”.
Inside Housing has asked if this refers to the evictions or to the other issues raised as well.
What is a REIT?
A real estate investment trust (REIT) is a company that raises money by issuing shares on the stock market and uses it to buy up property in order to raise income and provide a dividend to its shareholders. REITs generally aim to provide a 5% return to investors.
They are exempt from corporation tax on any profits they derive from their property rental businesses.
REITs have been investing in other areas of real estate for decades but have only become involved in social housing since 2016.
In general, the REITs that have launched in the sector have bought properties, repurposed them to be used as supported housing, and leased them to housing associations that own very few homes themselves at levels of rent linked to inflation.
