The Regulator of Social Housing has concluded that Highstone Housing Association is “non-compliant with the Governance and Viability Standard and the Rent Standard.”

Following a reactive investigation, RSH found “clear conflicts of interest between Highstone and third-party property companies.”

Highstone has “failed to ensure that these arrangements are in the best interest of the registered provider and do not inappropriately advance the interests of the third parties.”

RSH also identified “inadequate reporting on financial performance and accounting, as well as poor decision making due to a lack of appropriate skills and independence at board level.”

The regulator also found no evidence that Highstone has appropriate financial plans and mitigations in place for its long lease-based model. In addition, Highstone did not provide assurance that the rents it has charged to tenants comply with the Rent Standard.

In response to the regulator’s investigation, Highstone has recruited new independent board members and commissioned a review of its governance arrangements and its compliance with the Rent Standard.

Harold Brown, RSH’s Senior Assistant Director for Investigations and Enforcement, said: “Our investigation into Highstone Housing Association has revealed clear conflicts of interest at board level, as well as a failure to plan appropriately for the risks that come with a long-term lease-based model. Highstone has also failed to assure us that its rents comply with our standards.

“We are engaging intensively with Highstone’s new board as it works to return to compliance with our standards.”