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Council calls for investigation into association previously accused of ‘sham transactions’
A local authority has called on the English social housing regulator to investigate a housing association previously sued for “sham” affordable housing transactions.
Following an Inside Housing investigation, Hackney Council has written to the Regulator of Social Housing about a housing association previously accused by Southwark Council of breaking agreements to provide affordable housing, asking it to investigate.
London District Housing Association (LDHA) “conspired” to use “sham transactions” to sell properties on the open market that were supposed to be sold as shared ownership, Southwark Council alleged in court in 2016.
The association signed Section 106 agreements agreeing to provide homes as shared ownership but then sold them at full market price, the council claimed.
Southwark Council took LDHA and several other organisations to the High Court in 2015 and 2016. Both cases reached confidential settlements, with the defendants denying all allegations and none of them conceding they were any part of any sham transaction or conspiracy. In July last year, a judge authorised the council to buy the homes back.
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According to information obtained by Inside Housing from the Land Registry, Companies House and through the Freedom of Information Act, a number of homes formerly owned by LDHA have since been bought by St Andrews Community Housing Association (Sacha) and Kinsman Housing.
These sites are in Camden, Ealing, Lewisham, Hackney, Westminster, Kensington and Chelsea, Wandsworth and Greenwich.
The London Legacy Development Corporation said it will check all relevant homes are being used as affordable housing.
On these sites, homes were earmarked for affordable housing through Section 106 agreements with the developers before the affordable portions were sold to LDHA.
Sacha and Kinsman received funds from companies that funded LDHA and that were owned by Terry McMillan and which were accused by Southwark Council of being part of the “conspiracies” to violate Section 106 agreements.
A former Sacha director, Floretta West – who resigned in October 2016 – was also accused by Southwark in court of buying a flat in South City Court that should have been used as affordable housing, from one of Mr McMillan’s companies.
Kinsman has as a director Graham De Roy, a former director of LDHA. It has also recently opened its head office in a building in Bermondsey owned by Mr McMillan.
None of LDHA, Sacha, Kinsman, Mr McMillan, Ms West or Mr De Roy responded to requests for comment.
A spokesperson for Wandsworth Council said: “We have looked into the purchase of this property by LDHA and our initial investigations indicated that the homes were sold on a shared ownership basis.
“However, the council is concerned about LDHA’s involvement in this scheme and shares Southwark’s desire to unravel their activities. We would of course welcome any further information in addition to that we have already gathered that would help us determine if they have abided by Section 106 requirements.”
A spokesperson for Kensington and Chelsea Council added: “Planning permission was granted for the redevelopment of [the LDHA site], including requirements for affordable housing. Any new development proposals for the site would still need to honour these obligations.”
Inside Housing Spotlight
Inside Housing Spotlight is a series of pieces showcasing the best of our investigative and data journalism.
Spotlight pieces:
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12 October 2018: The ballad of Knowsley Housing Trust the inside story of the first housing association made non-compliant by the sector's watchdog for fire safety issues
13 September 2018: How tweaked building guidance led to combustible insulation on high rises: an investigation shows how lobbyists from the plastic insulation industry supported a quiet tweak to building guidance to permit combustible insulation on tall buildings
31 August 2018: The true cost of homelessness Freedom of Information requests reveal the soaring costs of temporary accommodation
30 August 2018: The forgotten threat to high rise tenants We investigate the threat posed by combustible window panels on social housing high rises
13 June 2018: The Biggest Ever Survey of Fire Risk Assessments Data journalism revealing widespread fire safety issues in more than 1,500 tower blocks across the country
12 April 2018: A Section 106 Story An investigation into allegations of "sham transactions" involving Section 106 deals in south London
23 March 2018: The Paper Trail: The Failure of Building Regulations A lengthy investigation into the failures of building regulation that may have contributed to the Grenfell Tower disaster, and the many missed warnings
23 February 2018: The Kingspan Papers Leaked meeting notes reveal some worrying issues, including allegations of fire safety report doctoring by manufacturers
9 February 2018: Gentoo: a Sunderland story We look back at the recent history of Sunderland’s largest housing association.
25 January 2018: Homeless families face long stays in council-owned hostels we reveal how councils in London are skirting the law by using hostels to house people in temporary accommodation for more than six weeks
7 December 2017: Council house to private rent We reveal the percentage of former Right to Buy homes in the private rented sector has passed 40%
17 November 2017: Rent to buy, or rent to rent? A look at how successful the government's Rent to Buy schemes have been
7 September 2017: Once upon a time in the west The history of KCTMO in the years before the Grenfell Tower fire
11 August: 2017 Grenfell: The paper trail - our news editor Pete Apps examines seven years of council documents to tell a story of the missed opportunites to prevent the Grenfell tragedy
4 August 2017 : Knowing the risks – the most common fire safety problems in tower blocks
26 May 2017: Rents hiked for RTB replacements – Sophie Barnes reveals less than half of Right to Buy replacement homes are for social rent
12 May 2017: A stark warning – a prescient piece looking at lessons to be learned from the Shepherds Bush tower block fire
13 April 2017: Where the axe will fall – a look at plans to axe housing benefit for younger people
10 Feb 2017: Circle of Despair – the inside story of Circle's repairs and maintenance troubles
3 Feb 2017: The Benefit Cap Tightrope – Sophie Barnes unveils the first exclusive analysis of the lower benefit cap
