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East Anglian housing association in talks to merge with non-compliant landlord
The East Anglian housing association Flagship Group has revealed it is in talks to merge with a small housing association which was declared non-compliant with the English regulator’s standards last year.
Suffolk Housing was given a G3 rating by the Regulator of Social Housing (RSH) in January last year because of “significant weaknesses” in its governance.
According to a judgement issued at the time by the regulator, the 2,900-home association’s board “failed to demonstrate an effective approach to reporting, quantification and management of key risks”.
The board of Flagship, which now manages around 28,000 homes, is speaking to Suffolk Housing’s board about the latter potentially becoming a subsidiary of the former.
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At the time of its downgrade, Suffolk Housing also saw its rating for financial viability fall from V1 to V2, which is still a compliant rating.
The regulator said that the organisation’s stress-testing was “inadequate” and its mitigation strategies were “not fully developed”.
It is not uncommon for a housing association in regulatory difficulties to be acquired by a larger landlord, usually with the encouragement of the RSH.
Inside Housing has asked Flagship whether the regulator was involved and whether it was a ‘rescue merger’. A spokesperson for Flagship said: “It’s not a rescue merger. Suffolk Housing has been proactively looking for a partner and recognises the benefits of working with Flagship.”
Carole Taylor-Brown, chair of Suffolk Housing, said: “By pooling our experiences and resources we will make faster progress.
“Most encouragingly, Flagship appreciates the importance of continually improving services to residents and share our purpose to provide homes for those who need them most. By joining forces, we can create an enhanced offer for our customers, as well as increased career development opportunities for colleagues.”
Peter Hawes, chair of Flagship, added: “We are in the very early stages of talks, but we believe that by working together we can better meet the challenges faced by all housing associations to deliver more homes, better services and continue our strength for years to come.”
If the talks are successful, this could be Flagship’s second acquisition of the year, after it acquired the 5,000-home association Victory Housing Trust as a subsidiary in January.
In numbers: Flagship Group and Suffolk Housing Society
| Total | £30,733.00 | £175,971,000.00 | £47,126,000.00 | £854,522,000.00 | £1,739,614,000.00 |
| Organisation | Total stock | Turnover | Pre-tax surplus/deficit | Loans | Assets |
|---|---|---|---|---|---|
| Flagship Group | 22,705 | £133,725,000 | £37,049,000 | £683,320,000 | £1,516,123,000 |
| Victory Housing* | 5,106 | £25,742,000 | £7,988,000 | £67,000,000 | £23,333,000 |
| Suffolk Housing Society | 2,922 | £16,504,000 | £2,089,000 | £104,202,000 | £200,158,000 |
**Victory Housing joined Flagship Group as a subsidiary in January 2019
Source: Figures are for 2018/19 and are taken from www.housingexpert.com
