Supported housing provider enters CVA

According to Devonshires, if the CVA had not been granted, My Space would have been forced into voluntary liquidation. This would have resulted in it having to immediately hand back properties to landlords, “putting hundreds of residents at risk of homelessness”.

Jim Varley, partner at Devonshires, who acted for My Space, said: “The approval of the CVA means the business is saved and the residents, many of whom are vulnerable, are not impacted in any way.

“The alternative would have been a disaster for residents as landlords would not be able to swiftly find an alternative social housing provider to manage the properties.

“We are delighted to have been able to act for My Space in this matter and to have helped protect the vulnerable residents from a difficult situation.”

My Space has been contacted for comment.

Regulator of Social Housing

The CVA follows an enforcement notice on My Space by the Regulator of Social Housing (RSH) in January 2023.

Within this, the regulator said that My Space must commission solvency advice to explore three options: a CVA, administration and the ability of My Space to trade solvently.

Alongside the enforcement notice, the regulator downgraded My Space from its existing non-compliant grades of G3/V3, which were issued in December 2020, to the lowest grades of G4/V4.

At the time, the RSH said the provider remained non-compliant with the standard after “intensive regulatory engagement” since December 2020.

“This downgrade reflects that there are issues of serious regulatory concern, and My Space is subject to regulatory intervention or enforcement action both in relation to governance and financial viability,” the regulator said in its announcement at the time.

“In considering whether to serve an enforcement notice, the regulator has considered Section 218 of the [Housing and Regeneration Act 2008] and concluded this is a serious and recurrent case of non-compliance where My Space has failed to address the breach of standards in a prompt and effective manner.”

First Priority Housing Association

This is understood to be only the second CVA in the social housing sector. First Priority Housing Association, a lease-based provider focusing on the provision of specialised supported housing, was the first to undergo a CVA. 

First Priority’s CVA lasted around nine months from its approval in July 2018 to its completion in April 2019.

The CVA enabled it to renegotiate its long-term leases onto a basis that the provider believed was more sustainable.

Social Housing REIT

Social Housing REIT is a real estate investment trust (REIT) that invests in specialised supported housing and has 34 properties let to My Space.

In its latest update published on 10 March, Social Housing REIT’s investment manager, Atrato Partners, said My Space’s proposal for a CVA was approved by a creditor vote on 7 March. Atrato added that it had successfully negotiated an option agreement with My Space ahead of the CVA process.

It said this option that Social Housing REIT entered enables it to transfer all My Space leases within a 12-month period following the completion of the CVA challenge period.

“Atrato is already in advanced discussions with alternative approved providers and will confirm details of the proposed transfers in due course,” Social Housing REIT said in the trading update.

“Atrato is also actively working with My Space to ensure there is no disruption to residents during this period.”

Atrato took over as Social Housing REIT’s investment manager from Triple Point Investment Management at the start of January.

In its previous trading update in February, Atrato had said it was reviewing whether to support My Space’s proposals for a CVA.

Atrato declined to comment.