The Regulator of Social Housing (RSH) has found serious failings with two registered providers.

Following an investigation, RSH found that Aves Housing, which provides accommodation to homeless people across London, is not meeting the Governance and Financial Viability Standard or the Rent Standard.

RSH’s findings follow a First Tier Tribunal judgement about benefit appeals and action taken by eight London boroughs to stop almost all payments – due to concerns that the housing is not exempt accommodation and there was no entitlement to housing benefit.

According to the regulator, the tribunal found that Aves made substantial profits for a third party that had control over its operations and overcharged for services. The tribunal also found that the tenants did not need support or were not provided with support as claimed. In addition, licence agreements had taken advantage of housing benefit rules that allow for enhanced payments. Aves failed to self-refer to RSH following the tribunal judgement.

RSH says it has found fundamental failings in the way Aves is run and has concerns that it has given up control of its business and is not operating as a genuine not-for-profit. Aves has not shown that the board has enough skill, capacity and independence to manage its affairs. RSH says it expects Aves to get independent assurance to show that it is keeping tenants safe in their homes and mitigating potential risks.

Aves has not shown that it can manage material financial risks. It relied on housing benefits and higher rates of rent as its main income. This has now reduced significantly following action taken by local authorities to stop payments. Aves has also failed to show that its rents are set in a way that meets RSH’s Rent Standard and that they are below market rate.

RSH will work intensively with Aves, but the information provided so far has been inconsistent and contradictory. RSH will review all options, including the use of enforcement powers.

Jonathan Walters, Chief Executive of RSH, said: “Supported accommodation is vital to serve some of the most vulnerable people in society. We will absolutely not tolerate cases where social landlords misrepresent their status as not for profit to take advantage of enhanced housing benefit payments or charge higher rents when they are not justified.

“We have serious concerns about Aves’s ability to solve these issues. Our scrutiny will remain intensive and, if Aves cannot or will not put things right, we will consider using our regulatory and enforcement powers. We continue to work with local authorities and other public bodies to ensure that social landlords meet their responsibilities.”

Meanwhile, RSH has also published a regulatory judgement for YMCA Thames Gateway (YMCA TG) following an investigation.

According to the regulator, YMCA TG does not have an up to date understanding of the condition of tenants’ homes. The landlord also cannot show that it meets all legal health and safety requirements, or that it is providing an effective repairs service.

YMCA TG has not effectively managed its risks, which has led to a significant deterioration in liquidity and a failure to ensure covenant compliance. While YMCA TG has managed its position with funders, it has placed its social homes at risk.

YMCA TG’s board has been taking steps to address its acute viability position and ensure that its social homes are protected, and it is working positively with RSH.

RSH published a further 18 regulatory judgements today, as part of its regular batch of outcomes from inspections and responsive engagement.

C1 gradings have been awarded to bpha, Derby City Homes, Folkestone and Hythe District Council, Magenta Living and Vico Homes. Eastlight Homes has been upgraded from C2 to C1.

Commenting on being awarded a C1, Andy Lomas, Chief Executive of Magenta Living, said: “We’re genuinely pleased to have achieved a C1 grading, particularly as this was our first inspection against the new Consumer Standards.

“Most importantly, this judgement reflects the commitment our colleagues show every day to delivering for customers. Whether that’s keeping homes safe, investing in communities, listening to feedback or improving services, customers are at the heart of what we do.

“While we’re proud of this achievement, we also recognise that C1 is the standard customers should expect from us. We’ll continue to listen, learn and improve as we deliver our Road to 2030 ambitions and work to create even better outcomes for the people and communities we serve.”

Richard Hill, Chief Executive of bpha, said: “Receiving the highest consumer grading from the Regulator of Social Housing is an important achievement for bpha.

“It reflects the hard work of colleagues across the organisation and the valuable contribution of customers, whose feedback and involvement continue to shape our services. We are proud of this recognition, while our focus remains on continuous improvement so that every customer consistently receives an excellent experience.”

Commenting on its C2 grading, Cllr Lynne Schuller, Cabinet Member for Housing and Estates at Bassetlaw District Council, said: “We welcome and accept the judgement of the regulator which confirms the areas where improvement is needed and thank them for this external scrutiny. This will provide absolute clarity of focus, so that we can continue with our journey towards achieving the top C1 rating.

“We are also pleased with the positive aspects the regulator reported on throughout the inspection, especially that Bassetlaw’s Housing Team demonstrated that it treats its tenants with fairness and respect, evidenced by a positive and respectful staff culture and strong tenant feedback.”

Landlord	Consumer	Governance	Viability	Engagement process
Bassetlaw District Council	C2 (first grading)	–	–	Inspection
bpha Limited	C1 (first grading)	G1 (assessed and unchanged)	V1 (assessed and unchanged)	Inspection
Durham Aged Mineworkers’ Homes Association	C2 (first grading)	G2 (downgrade)	V1 (assessed and unchanged)	Inspection
Delta Housing Limited	– (not assessed yet)	G1 (interim grading)	V2 (interim grading)	Interim judgement
Derby City Council	C1 (first grading)	–	–	Inspection
Eastlight Community Homes Limited	C1 (upgrade)	G1 (based on previous assessment)	V1 (based on previous assessment)	Responsive engagement
East Riding of Yorkshire Council	C2 (first grading)	–	–	Inspection
English Rural Housing Association Limited	C2 (first grading)	G1 (assessed and unchanged	V1 (regrade)	Inspection
Folkestone and Hythe District Council	C1 (first grading)	–	–	Inspection
Local Space	C2 (first grading)	G1 (assessed and unchanged)	V1 (assessed and unchanged)	Inspection
Magenta Living	C1 (first grading)	G1 (assessed and unchanged)	V2 (assessed and unchanged)	Inspection
Newark and Sherwood District Council	C2 (first grading)	–	–	Inspection
Sage Homes RP Limited	– (not assessed yet)	G1* (assessed and unchanged)	V2* (assessed and unchanged)	Stability check
Sage Rented Limited	– (not assessed yet)	G1* (assessed and unchanged)	V2* (assessed and unchanged)	Stability check
South Kesteven District Council	C2 (first grading)	–	–	Inspection
Sparrow Shared Ownership Limited	C1* (based on previous assessment)	G1* (assessed and unchanged)	V1* (assessed and unchanged)	Stability check
Stoke-on-Trent City Council	C2 (first grading)	–	–	Inspection
Vico Homes Limited	C1 (first grading)	G1 (assessed and unchanged)	V2 (assessed and unchanged)	Inspection