Broadacres points to housebuilder collapse after being placed on regulatory 'watchlist'

The Homes and Communities Agency (HCA) said it is ‘currently investigating a matter that may impact on the provider’s compliance with both the governance and financial viability elements of the governance and financial viability standard’.

A provider’s grading is under review when its compliant grade is being investigated in relation to an issue that may result in a downgrade to a non-compliant grade. Broadacres HA’s current grade is G2 and V2.

In a statement, Broadacres, which has 5,900 homes in North Yorkshire, said: ‘This relates to one of our development subsidiaries which unfortunately, suffered when the contractor Southdale Homes went into administration.

‘The Broadacres board has since adopted a new business plan to address the situation.’

Southdale Construction, which went into administration in May 2015, was delivering over 1,000 homes for Broadacres’ development subsidiary Mulberry Homes Yorkshire.

Broadacres’ accounts for 2015/16 include a £3.8m exceptional item with Mulberry Homes projecting a ‘significant loss on ongoing schemes’ stemming from the Southdale Construction collapse.

Mulberry Homes also announced in June 2015 that Moody Construction had replaced Southdale on a 990-home site, while Lindum York took over at a 80-home site.

Kier novated 17 contracts with a combined value of £55m from Southdale, including range of public sector clients. Kier also took on around 130 employees.

The outcome of the regulatory investigation will be confirmed in an updated regulatory judgement.