For-profit housing association rated non-compliant by the RSH

“This is a serious failing and urgent action is required to ensure the continued operation of Rosewood, and that tenants’ homes are protected. We will consider using further powers if required.”

Inland launched its for-profit housing association in August 2018.

The regulator said that Rosewood’s ability to meet the regulatory standards had been “impacted by the viability of its unregistered parent company and wider group entities, which are now in administration and therefore unable to ensure appropriate support or assistance as necessary to the registered provider”.

“Rosewood has failed to demonstrate that it has an appropriate, robust and prudent risk and control framework in place that ensures access to sufficient liquidity at all times,” according to the judgement.

Rosewood self-referred to the regulator in early 2023, after Inland issued a profit warning.

After investigating the housing association, the regulator identified a “reliance on the group for financial viability and provision of services”.

The RSH said: “Rosewood itself is not in administration and is currently continuing to trade, although it is reliant upon the continued support of the group and the administrators to do so while a sale of Rosewood is concluded.

“The administrators, whose general duties include acting in the best interest of the creditors of the insolvent companies, support the process.

“The regulator currently lacks assurance that Rosewood can remain viable, and that social housing and tenants’ homes may not be lost to the sector should a sale not transpire, or values not be achieved.”

It added that Rosewood was currently “only able to continue to operate with the support of the administrators” and that it had “limited assurance that this support will continue”.

“It is a serious failing that there could be a potential loss of social housing assets, a loss of the benefits of being within a regulated sector and/or tenants losing their home, due to the insolvency of unregistered elements of the group,” the judgement said.

The RSH also found that weaknesses in financial governance, including inadequacies in financial reporting, meant that Rosewood had a short-term reliance on several planned transactions “over which it had little or no control of timing”.

It said if planned sales of homes fell through, this would leave Rosewood reliant on funding from group entities, “which are now in administration”, to meet its liabilities.

According to the judgement: “The regulator sets out expectations that registered providers have governance arrangements and mechanisms in place, where registered providers have unregistered parents, to ensure that the registered provider’s ability to meet the regulator’s standards and other regulatory requirements is not and cannot be prejudiced by the activities or influence of the parent company or another part of the group.

“The governance arrangements and mechanisms have not demonstrated such effectiveness and the regulator lacks assurance that the robustness of the arrangements in place would ensure that the value of the social housing assets is not lost in the circumstances.”

Added to this, Rosewood’s accounts were now “significantly overdue”.

“We have concluded that Rosewood has not been able to demonstrate that it has managed its affairs with an appropriate degree of skill, independence, diligence, effectiveness, prudence and foresight,” the regulator said. 

Rosewood Housing has been contacted for comment.