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Two lease-based providers may be overcharging on rents, says RSH

Two non-compliant lease-based supported housing providers may have been overcharging the taxpayer for rents on “a large proportion” of their stocks, the Regulator of Social Housing (RSH) has said.

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Two non-compliant lease-based supported housing providers may have been overcharging the taxpayer for rents on “a large proportion” of their stocks, @RSHEngland has said #UKhousing

Regulatory notices have today been issued to Westmoreland Supported Housing and Trinity Housing Association declaring them in breach of the Rent Standard.

Westmoreland is currently graded G4/V3 by the RSH, indicating the lowest possible rating for governance as well as non-compliance with financial viability requirements due to “issues of serious regulatory concern”.

The latest notice means it has now been found in breach of six different RSH standards.

Trinity is graded G3/V3, indicating non-compliance with both governance and financial viability requirements.

Both organisations maintain that most of their stock is exempt from Rent Standard requirements because it constitutes specialist supported housing (SSH) with Trinity also claiming to provide some temporary supported housing (TSH).

However, the RSH said they are “unable to provide adequate assurance” that the accommodation they provide “meets the government’s definition of SSH”, or TSH.


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SSH is defined by the Ministry of Housing, Communities and Local Government as supported housing which has been designed or altered for “residents who require specialised services or support in order to enable them to live, or to adjust to living, independently within the community”.

It must involve “a high level of support, which approximates to the services or support which would be provided in a care home”.

Significantly higher rents – paid by housing benefit – may be charged for SSH than for other forms of social housing because of the cost of providing this care.

Westmoreland and Trinity are two of around 35 housing associations operating a business model which sees them lease property from investment funds to let as SSH in exchange for index-linked payments.

Current business plans for both organisations are “predicated upon [their] main income source (rent) being ‘excepted’ from the requirements of the Rent Standard”, the RSH said.

The RSH has been highly critical of the lease-based model and has declared 11 housing associations deploying it in some form non-compliant since early 2018.

Westmoreland and Trinity also claimed exemptions from the government-imposed social housing rent cut between 2016 and 2020 because of the type of housing they provide, but today’s regulatory notices said they have been “unable to demonstrate” that they “met the exception criteria during this period”.

The regulator therefore “lacks assurance” that the pair “complied with the legislative requirements” of the Welfare Reform and Work Act 2016, the notices added.

Board members at Westmoreland and Trinity have concluded that “as a result of historic inadequate processes, data and policies” they cannot “evidence the basis” for applying the SSH or TSH exceptions to large proportions of their housing stock, the RSH said.

As a result they are “unable to confirm” that they are “meeting the Rent Standard and the associated rent-setting guidance”.

Inappropriately applying rent requirement exceptions “is a serious matter”, the notices said, which may mean that rents and service charges for “a large proportion” of Westmoreland and Trinity’s tenants “may have been, and may continue to be, overcharged”.

“As some of the cost of these rents has been met through housing benefit and Universal Credit, there may also be implications for the public purse,” the RSH added.

Both boards have agreed action plans to “fully review” their property portfolios against the relevant rent criteria “as a matter of urgency” and have committed to act on the outcomes, according to the notice.

Westmoreland and Trinity have both reduced the size of their stocks dramatically since first being declared non-compliant by the RSH, having grown rapidly in the preceding years.

The former now has around 650 social housing units – less than half its stock at March 2019 – and the latter around 950.

In accounts published this month, Westmoreland admitted it faces “material uncertainty” over its ability to continue meeting financial obligations “for the foreseeable future”.

Steve Fensom, chief executive of Westmoreland, said: “Compliance with the Rent Standard is part of our ongoing dialogue with the Regulator of Social Housing.

“The regulator has previously acknowledged Westmoreland’s commitment to work with them on this matter. It forms a central plank in our ongoing recovery.”

Denise Shuker, chief executive at Trinity, said: “Trinity were given advance notification that the notice would be served, and we are committed to continue working with the regulator to overcome these historic challenges.”

Lease-based providers the regulator has found non-compliant

Regulatory gradings (for providers with more than 1,000 homes):

Prospect Housing (G3/V3 in May 2020)

New Roots (G3/V3 in February 2020)

Westmoreland (G4/V3 in September 2019)

Inclusion (G3/V3 in February 2019)

Sustain (UK) (G3/V2 in January 2019)

Trinity (G3/V3 in November 2018)

Regulatory notices (for providers with fewer than 1,000 homes):

Larch (November 2019)

Expectations (UK) (September 2019)

Bespoke Supportive Tenancies (May 2019)

Encircle (April 2019)

First Priority (February 2018)

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