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Lease-based provider rated non-compliant following investigation
England’s Regulator of Social Housing (RSH) has rated a lease-based provider linked to private equity as non-compliant for governance and financial viability.
In today’s judgement, it gave My Space Housing Solutions, which is based in Bolton and manages more than 1,200 supported housing units, a G3 for governance and V3 for financial viability.
The regulator said it had found “significant weaknesses in My Space’s business planning framework” and “inadequate risk management processes and internal controls”.
It also found the landlord’s board “has failed to manage its affairs with an appropriate degree of skill, diligence, effectiveness, prudence and foresight”.
The judgement comes three months after the RSH announced it was investigating My Space, which enters into long-term lease agreements with real estate investment trusts in exchange for inflation-linked payments.
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According to the regulator, My Space could not provide it with a business plan “based on appropriate and reasonable assumptions” and also has “no information on its long-term stock investment requirements”.
It added that My Space assumed its rent is ‘excepted’ from the requirements of the Rent Standard, as it manages specialist supported housing. However, the RSH said it lacks “assurance on how the board has satisfied itself that its rents are meeting the Rent Standard”.
My Space also has several long-term leases with no break clauses and fixed annual rent increases, which may expose it to changes in the external operating environment, particularly in relation to Housing Benefit, the regulator said.
The RSH has previously been critical of the lease-based business model and has already declared several housing associations that use it to be non-compliant.
Last year, Inside Housing reported that My Space received more than £5m in donations for the year to 31 October 2018, which was more than its overall surplus.
The regulators said that in response to its engagement, My Space has developed a financial and governance improvement action plan and provided assurance that it had sufficient liquidity to meet its short-term obligations as it considers its future strategic direction.
My Space has been approached for comment.
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