Housing association placed on watchlist

The Homes and Communities Agency (HCA) has put 5,500-home Saffron Housing Trust’s compliant governance grading under review as it issued a raft of regulatory judgements today.

The HCA said: “We are currently investigating a matter which may impact on Saffron’s current published compliant governance grading.” It would not expand on the reasons for the investigation.

Saffron currently holds G1 and V1 governance and viability gradings – the best possible ratings.

A spokesperson for Saffron said: “We have recently identified a governance issue within the trust and have informed all relevant bodies, including our regulatory body, the Homes and Communities Agency. We have taken all possible appropriate measures, including seeking expert legal advice, to ensure the situation is fully resolved as quickly as possible.”

The HCA also downgraded the governance grading of North Devon Homes (NDH) from a G1 to G2, but left its V1 viability rating untouched.

It said the 3,100-home association had “not been able to evidence sufficiently that its governance arrangements enable it to manage its affairs with an appropriate degree of effectiveness and foresight”. G2 means an association complies with standards but needs to improve.

“The latest NDH financial plan does not fully reflect the corporate plan or the revised development strategy. It does not include all planned development and does not consolidate [subsidiary] Anchorwood’s intended development and market sale activity,” the HCA added.

“These elements have not been stress tested, which dilutes our assurance that the growth plans are aligned with capacity, reflect the board’s risk appetite and that there are effective mitigation strategies in place to manage future risks.”

A spokesperson from North Devon Homes said it “fully acknowledged” the HCA’s comments and that it was addressing the issues highlighted.

Broadacres Housing Association, a 6,000-home landlord in north Yorkshire, was re-issued with a compliant G2 and V2 grading, meaning it needs to make improvements.

The HCA highlighted Broadacres’ increased financial risk because of the performance of its development company subsidiary Mulberry Homes Yorkshire.

A spokesperson for the association said: “Unfortunately, our main contractor going into administration did negatively impact upon Mulberry Homes Yorkshire’s business plan. Plans are now in place to turn this around.”