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Two landlords handed governance downgrades by regulator
Moat and Plus Dane Housing have been downgraded to a G2 rating for governance by the English regulator.
Alongside the governance downgrades, the two housing associations also received a C2 rating under the consumer standards.
Moat had its rating for financial viability downgraded to V2, while Plus Dane retained its V2 grade.
The C2 ratings mean there are “some weaknesses” in both landlords delivering the new consumer standards and that improvement is needed, the Regulator of Social Housing (RSH) said.
However, G2, C2 and V2 grades still mean providers are meeting the regulator’s standards.
On its judgement on 23,000-home Moat, the RSH said the landlord needs to improve the effectiveness of its risk framework.
“[Moat] does not consistently apply lessons learnt across the organisation or identify where there are trends in the weaknesses of internal controls,” the regulator said.
Alongside this, Moat has undergone “significant change within its leadership team” in recent years, which has impacted the pace of improvements, the judgement said.
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In its consumer judgement for Moat, the RSH said improvements are needed in the landlord’s provision of non-emergency repairs, including remediation of damp, mould and condensation.
Also, Moat’s approach to anti-social behaviour “continues to require improvement” given low levels of tenant satisfaction and limited evidence of the effectiveness of partnership working arrangements, the RSH said.
On its viability downgrade, the regulator flagged that Moat is continuing to develop new homes “funded largely by new debt, which exposes it to sales and interest rate risk”.
The judgement added: “This will mean that Moat has the capacity to respond to a reasonable range of adverse scenarios, but it will need to manage these material risks.”
Moat’s annual surplus halved last year due to a drop in staircasing on shared ownership homes.
In a statement, Gavin Cansfield, chief executive of Moat, said: “Although we are naturally disappointed with this outcome, we respect the regulator’s fair and balanced decision. We continue to engage actively with the RSH to address areas for improvement and value their feedback.
“We are fully committed to making the necessary changes and are confident in our ability to improve our performance in the identified areas.”
On Plus Dane, which owns 18,000 homes across Merseyside and Cheshire, the RSH said the association’s approach to business planning, stress-testing and mitigations needs strengthening.
The regulator also noted a number of financial risks to be managed, including developing homes for sale and making significant investment in its existing homes and services.
On the consumer standards, the RSH said Plus Dane “has more to deliver” to ensure sufficient understanding of its homes at an individual property level and reporting and assurance on damp and mould performance.
On governance, the regulator said Plus Dane has also undergone significant changes within its leadership team and that this affects its capacity while it continues to recruit.
Although a detailed repairs improvement plan is underway, “progress is slower than initially anticipated” and the landlord is not meeting its own targets for completing repairs, the RSH said.
Plus Dane has included “significant cost savings” in its base financial plan, but at present there is “insufficient evidence of the board’s understanding of the deliverability of any savings”.
A spokesperson for Plus Dane said: “We are disappointed with the outcome of our regulatory inspection and have moved on considerably since the beginning of August when the inspection took place.
“We are committed to working with the regulator over the coming months to provide the necessary assurance in the small number of areas identified for improvement.”
In other judgements, the RSH upgraded Salvation Army Housing Association to a G1 for governance, but gave it a C2 consumer grade. Its V2 grade for financial viability remained unchanged from the last inspection.
WHG received a C1 and retained its G1/V1 gradings.
Judgements were also published for a further 54 landlords; all but four retained their previous governance and financial viability ratings.
Arawak Walton Housing Association and Alliance Homes were downgraded to a V2 for financial viability.
In a statement on its website, Alliance Homes said the downgrade “reflects the reality of the economic pressures facing the entire housing sector”.
Habinteg and YMCA St Paul’s Group were upgraded to a G1 for governance.
Providers that retained their previous governance and financial viability ratings included:
- Accent Group (G1/V1)
- Anchor (G1/V1)
- BPHA (G1/V1)
- Bromford (G1/V1)
- Eastlight Community Homes (G1/V1)
- Hyde (G1/V2)
- Karbon Homes (G1/V1)
- Leeds Federated (G1/V2)
- Platform Housing Group (G1/V1)
- The Guinness Partnership (G1/V2)
- Vivid (G1/V1)
Kate Dodsworth, chief of regulatory engagement at the RSH, said: “Social landlords are currently facing a range of complex challenges and this makes careful scrutiny more important than ever.
“We are using all the tools at our disposal, including the new proactive inspections and the stability check programme, to ensure our standards are being met and tenants are protected.
“As soon as a landlord becomes aware of a potential issue, they should flag it to us immediately so it can be resolved as quickly as possible. We always welcome self-referrals, which shows a landlord is taking accountability and understands their responsibilities.”
Arawak Walton was approached for comment on the downgrade.
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