Places for People in talks to take on non-compliant landlord

At the time, the regulator concluded it “lacked assurance” that the landlord had “a robust business planning, risk and control framework”.

The RSH found weaknesses in SYHA’s internal controls framework and that the board of SYHA had “not been managing its affairs with an appropriate degree of skill, diligence, prudence and foresight”, it said at the time.

In the judgement, the regulator said weaknesses in financial governance led to SYHA miscalculating its covenant compliance over “a number of years”, leading to a historic covenant breach with one of its funders and a forecast breach for 2022-23.

“Cross default clauses with its other funders have exposed SYHA to wider loan agreement breaches,” the regulator said at the time.

“As a result of this it is evident that financial processes and controls have been inadequate, leading to incorrect financial information being shared with its funders, board and the regulator.”

SYHA told Social Housing: “Since the downgrade to G3/V3 in May 2023, South Yorkshire Housing Association (SYHA) has been working relentlessly to improve its governance and financial viability gradings.

“This has involved intensive engagement with the Regulator of Social Housing, which has been incredibly supportive throughout the process. We are pleased that the vast majority of the improvement plan is now complete.

“However, one of the significant items that impacts on SYHA’s financial viability is the SYHA board’s strategic decision to seek a merger partner. The announcement of partnership discussions with Places for People is a direct consequence of SYHA’s new strategy. The proposed partnership will both improve our financial viability and support us to continue to provide great services for our customers and communities.”

On the merger discussions, Larry Gold, chief executive of SYHA, said: “Our proposed partnership with Places for People will enable us to continue our 50-plus-year legacy providing high-quality homes and services.

“This is the right thing to do for our customers, communities, employees and partners, and the partnership will be hugely beneficial for Sheffield City Region. As we progress with our discussions, we will ensure that our customers are kept informed about the partnership and have the opportunity to share their views.”

Greg Reed, group chief executive of Places for People, said: “South Yorkshire, and specifically Sheffield, is a core region for PfP and, like SYHA, we’ve been here for many years.

“Bringing our organisations together – pooling our skills and experience – will make us a greater force for good in the region, enabling us, under one group, to have a more significant impact, and further supporting the development of thriving communities.

“We’re excited about what we can achieve together, and we’ll provide an update on our conversations in due course.” 

In April last year, Places for People completed its merger with London landlord Origin Housing, which had also been non-compliant prior to the partnership.

Last week, Paradigm Housing Group and Settle announced that they had entered discussions to create a new 30,000-home group.