In a regulatory judgement published today (19 December), the Regulator of Social Housing has announced that it will take enforcement action against My Space Housing Solutions (My Space). The regulator has also downgraded My Space's already non-compliant grades for financial viability and governance to the lowest possible grades (V4 / G4).
The regulator previously found My Space non-compliant with its economic standards in December 2020, when it was given G3 and V3 ratings. Since then RSH has been pushing My Space to improve and return to compliance, but My Space has failed to do so.
The regulator continues to have significant concerns about My Space's financial viability and liquidity. It has not been able to provide assurance that it is solvent, and appears to be entirely reliant upon continued financial support from third parties to be able to continue trading.
There are also significant weaknesses with My Space's governance. Its board oversight and internal controls have broken down and the board has been unable to provide evidence that it has managed conflicts of interest appropriately.
The regulator has further concerns about a wide range of property transactions that My Space has entered into with a connected property developer. The extent of the transactions and relationships between staff and board members with the developer have raised serious questions on whether the transactions are inappropriately advancing the interests of third parties.
In addition, My Space has failed to assure the regulator that its homes meet the definition of Specialised Supported Housing and that it has not mis-claimed on these homes in relation to rent.
As a result of this continued failure to return to compliance, the regulator is using its powers to take enforcement action against My Space.
Harold Brown, RSH's Senior Assistant Director for Investigations and Enforcement, said:
We have significant concerns about the way My Space is run, including failures by the board to manage potential conflicts of interest with a connected property developer. My Space has also failed to provide evidence that it is financially viable.
This is unacceptable. We do not have confidence in the ability of My Space's board to address the issues we have identified, so we are taking enforcement action to make the provider improve.
Notes
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Registered providers of social housing with more than 1,000 units are awarded both governance (G) and financial viability (V) grades for their compliance with the Governance and Financial Viability Standard. Grades of G1 and G2 indicate compliance with the governance element of the Governance and Financial Viability Standard, while grades of G3 and G4 indicate non-compliance. Similarly, V1 and V2 grades indicate compliance with the financial element and V3 and V4 grades indicate non-compliance.
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My Space's gradings are now G4 and V4. Its previous gradings were G3 and V3. RSH is in the process of serving an Enforcement Notice on My Space under section 219-224 of the Housing and Regeneration Act 2008 (the Act).
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RSH promotes a viable, efficient and well-governed social housing sector able to deliver and maintain homes of appropriate quality that meet a range of needs. It does this by undertaking robust economic regulation focusing on governance, financial viability and value for money that maintains lender confidence and protects the taxpayer. It also sets consumer standards and may take action if these standards are breached and there is a significant risk of serious detriment to tenants or potential tenants.
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