North East provider breaches Rent Standard while two landlords are downgraded to V2

JRHT incorrectly assumed 89 of its units were SSH, and therefore excepted from the rent standard, the RSH added.

 

The regulator said that, following investigations instigated by its board, JRHT had evidence that exceptions to the rent standard had been misapplied to these units, some since 2007. This led to incorrect rents being charged to tenants.

 

The RSH said that JRHT had also identified errors in relation to rent-setting for up to 400 fair-rent tenancies. This is a result of not reviewing the registration of its fair-rent tenancies since 2008. The maximum fair rent has been exceeded for at least 183 tenancies.

 

It is estimated that JRHT overcharged at least £479,000 in respect of these issues, the regulator added.

 

The RSH said JRHT’s board became aware of the issues as a result of its own investigations, had accepted the regulatory findings and was “engaging positively” with the regulator while working alongside external advisors to resolve the issues.

 

As part of this work, it is carrying out a detailed review of rent-setting across all the homes it provides.

 

JRHT will identify and reimburse the tenants who have been overcharged and ensure its rent policies comply with requirements.

 

While this review is not yet complete, JRHT has developed a plan to address the issues that have already been identified.

 

This includes creating a plan to reset the rents in question to the correct levels, reimbursing the tenants who have been overcharged and communicating with them, as well as reviewing rents and service charges across all properties.

 

Karen Doran, director of regulatory engagement at the RSH, said: “Joseph Rowntree Housing Trust’s failure to set rents correctly has led to tenants being overcharged. It is now working with us to make sure it charges rents correctly and puts things right for the tenants who have been affected.”

 

A JRHT spokesperson said: “JRHT has recently undertaken a proactive review of all the rents we have charged our residents in recent years.

 

“During this review we have discovered that we have incorrectly categorised 89 properties as specialised supported housing, which resulted in the one per cent rent reduction not being applied between 2016 and 2020.

 

“In a separate issue, we also found that, as a result of not re-registering fair rents, the maximum fair rent has been exceeded on at least 183 tenancies, which means that residents have been overcharged.

 

“In all cases, we will arrange for this money to be paid back, either directly to the resident or, if the rent is paid by housing benefit, directly to the local authority.

 

“Some residents have already been made aware of this oversight and have had assurance that immediate action is being taken to correct it. We will be communicating with other residents over the coming weeks.”

Viability downgrades

 

The RSH has downgraded the viability grades of both Cheshire Peaks & Plains Housing Trust and Citizen Housing Group, from V1 to V2. Both retained their G1 ratings.

 

The regulator said Citizen, which manages over 50,000 homes across the West Midlands, had “significantly” accelerated the delivery of its energy-efficiency programme, leading to increased investment in its existing homes.

 

The RSH said in the report: “Delivering this alongside its ongoing development programme means that the business plan is funded by an increased level of indebtedness. When set in the context of economic pressures including inflation and interest rates, this impacts on Citizen’s capacity to respond to adverse events.”

 

Gary Booth, chief financial officer at Citizen, said: “The Regulator of Social Housing has made it clear the driver for our regrade was our conscious decision to accelerate our retrofit improvement works on our existing homes to bring properties up to a minimum [Energy Performance Certificate Band] C rating.

 

“We decided, with full support of our board, to submit a significant bid for Wave 2 funding of the Social Housing Decarbonisation Fund last autumn and we were awarded £24m to contribute towards the £74m cost of the works. By the end of 2025, we will have carried out energy-efficiency improvements to over 2,000 of our homes.

 

“These works will improve the energy efficiency of our customers’ homes ahead of the government’s 2030 target and will follow our success from the funding we received in Wave 1 of the Social Housing Decarbonisation Fund.”

 

The RSH said Peaks & Plains, which manages over 5,000 homes across Cheshire and the High Peak, was investing “significantly” in its existing stock and in developing new homes and, as a result, interest cover had been reduced.

 

Additional investment will also be required to ensure continued compliance with fire safety targets.

 

“These factors, set in the context of economic pressures including inflation and interest rates, impact on Peaks & Plains’ capacity to respond to adverse events,” the RSH said.

 

Mark Howden, chief executive of Peaks & Plains, said: “We concur that the trust remains in a strong position in terms of governance and has an adequately funded business plan.

 

“Our viability rating, like many others across the sector, reflects the challenging environment we operate in and our clear strategic priority to continue to invest in our homes and services.”

 

Confirmation of existing grades

 

The RSH has confirmed the existing grades of G1/V2 for the Onward Group and Irwell Valley Housing Association, but changed the basis for their viability grades.

 

The regulator said both providers were investing in their existing stock while developing new homes. Alongside economic pressures such as inflation and interest rates, this was affecting their ability to respond to adverse events.

 

Bronwen Rapley, chief executive of Onward Homes, said the regulator’s judgement confirmed that the housing association was in a “strong position” to deliver for its customers.

 

She said: “Onward is well governed, financially stable and capable of meeting the objectives set out in our corporate plan.

 

“Social housing continues to face political, reputational and financial pressures. Onward is well equipped to face these challenges and continue making the Onward difference: enabling people to be their best, in a home they love, and a place they are proud of.”

 

Sasha Deepwell, chief executive of Irwell Valley Homes, said the group was pleased to maintain its gradings.

 

She said: “The top G1 rating highlights we are a well-governed organisation, while our V2 grading recognises how we continue to balance our financial viability and security with plans to improve our existing homes, regenerate communities and build more much-needed new homes.

 

“Against the backdrop of an extremely challenging economic climate, with high inflation and soaring interest rates, we are satisfied to have maintained this V2 rating.

 

“Irwell Valley Homes celebrates its 50th birthday this year and these findings show us to be in a strong and stable position as we look ahead to the future.”

 

The regulator also confirmed the existing grades of two social landlords: Aspire Housing and Legal & General Affordable Homes.

 

Aspire Housing, which manages over 9,000 homes, kept its G2/V2 rating.

 

“Aspire Housing has been working proactively with the regulator on our G2 to G1 strategy since January 2023, with a number of changes being implemented over the past nine months,” a spokesperson said.

 

“We will continue that work into 2024, where we look forward to a further grading review.”

 

For-profit Legal & General Affordable Homes maintained the existing G1*/V1* grades it had been awarded in February, when it became the first for-profit provider to be granted compliant gradings. (The asterisk on the gradings denotes the “qualitative” differences between for-profits and not-for profits, as previously set out by the regulator.) 

 

Chief executive Ben Denton said this reflected the provider’s “robust approach”.

 

He said: “We hold ourselves to high standards, continuously innovating and improving the quality of our homes and customer service, while ensuring we can deliver much-needed affordable homes.”