Subsidiaries at for-profit shared ownership specialist Heylo go bust

Meanwhile, three directors have stepped down from the board of Heylo’s for-profit registered provider.

Inside Housing Living understands the administrations came after a restructuring dispute between Heylo’s investors.

Heylo’s registered provider, HHRP, leases homes from property investment companies within the Heylo Group, which are each backed by different investors including BlackRock and other large insurance and pension companies. HHRP then onward-leases the homes to customers on a shared ownership basis.

In 2022, Heylo was handed non-compliant G3/V3 grades by the Regulator of Social Housing (RSH), which said this business model posed a “significant risk” to the for-profit’s ability to protect its social housing assets and “ensure its long-term viability”.

To regain compliance with the RSH, Heylo had committed to transfer its asset-owning subsidiaries directly under HHRP, its main registered provider, with the purpose of giving HHRP direct control.

The investors of HH1 and HH5 did not agree to the restructure, so administrators were appointed for the two investment vehicles on 12 March. These investors have not been named.

Inside Housing Living understands that Heylo Group’s other investment companies, HH2, HH3, HHSB and HH7, are not affected by the administration. HHRP remains non-compliant with the RSH but is not in default or administration.

ResiManagement, a sister company of Heylo Group which manages the homes within Heylo’s investment companies, is also unaffected.

ResiManagement will continue to manage the shared ownership homes during the administration until PwC sells the homes to new investors. It is expected that the homes owned by HH1 and HH5 will be sold to another registered provider, keeping them in the social housing sector, once the administration process is complete.

Shared owners’ homes, leases and rights remain unchanged. The only change for people in HH1 and HH5 homes is the control of the company owning the property alongside the shared owner, which is now PwC.

In a separate event, three directors of HHRP, Andrew Geczy, Tim Willcocks and Tom Nicholson, have stepped down from the board. New directors are being sought as soon as possible.

Although they have stepped down from the HHRP board, Mr Geczy and Mr Willcocks will remain in their roles as chief executive and chief customer officer of Heylo respectively.