Two small housing associations under investigation by the regulator

The regulator has previously been critical of this model, in which housing associations pay monthly index-linked payments to the REITs that own the properties they manage.

Pivotal currently manages roughly 450 homes for ‘vulnerable’ people in areas including Cornwall, Gloucester and Dorset.

Neither Pivotal or Hilldale currently has a regulatory grading as the regulator does not provide gradings to landlords with fewer than 1,000 homes.

There are currently only two other providers on the regulator’s GUR list, Salvation Army Housing Association and Brent Community Housing.

Social landlords are removed from the list once the outcome of the regulator’s investigation is confirmed via a regulatory judgement.

Derek Street, chair of Pivotal Housing, said: "Whilst it is disappointing, it is of no surprise, as we identified some historic issues, as a new board and executive 18 months ago, which needed addressing.

"We have implemented a series of improvements in those 18 months but we recognise there is still more work to do.

"We welcome the closer regulatory engagement and the opportunity to further strengthen the housing association which we are confident we will achieve.”

James Boyd, chair of Hilldale Housing Association, said: “A new board was appointed at Hilldale in September last year and immediately commenced a comprehensive review, working with the regulator, to deal with issues of concern.

"We will continue our engagement with the regulator in their review and will address the findings in due course. This to ensure that we continue to have a strong business and provide great service to our tenants."