We are engaging with Home Group Scotland about its tenant and resident safety, development plans and because it is a systemically important landlord.
We refer to a small number of RSLs as systemically important because of their stock size, turnover or level of debt or because of their significance within their area of operation. We need to maintain a comprehensive understanding of how their business models operate, and how they manage the risks they face and the impact these may have. So we seek some additional assurance each year through our engagement plans. Given a combination of Home Group Scotland’s size, turnover and level of debt we consider it to be systemically important.
Home Group Scotland is one of the largest developers of new affordable housing in Scotland. It has plans to grow through a considerable programme of new homes for social rent and mid-market rent and will receive significant public subsidy to help achieve this.
In November 2022 Home Group Scotland identified an issue with a small amount of cladding on one of its buildings. Home Group Scotland commissioned a Publicly Available Specification (PAS) assessment for one of its buildings which made a number of recommendations. Home Group Scotland has completed all recommended actions. A Single Building Assessment (SBA) has now been instructed for the building to determine whether any further remediation is required. Home Group Scotland has been engaging with us openly and constructively throughout the process.
What Home Group Scotland must do
Home Group Scotland must:
- send us copies of its Board and audit committee minutes as they become available;
- send us by 30 April 2025:
- its approved business plan;
- its updated risk register, including details of its approach to development risk management and mitigation;
- the report(s) to the Board/appropriate committee about the plan and approach to risk management and mitigation; and
- evidence of how it demonstrates affordability for its tenants.
- send us an update on its development programme by 31 October 2025. This will include its latest report to the governing body/appropriate committee about development and details of the scale and tenure mix, timescales for delivery and any material delays or changes to the programme;
- tell us if there are any material adverse changes to its development plans which might affect its financial position or reputation, in line with our notifiable events guidance; and
- send us monthly updates on progress with its plans to address its tenant and resident safety issues. This includes completion of an SBA in one of its buildings.
What we will do
We will:
- review the minutes of the Board and audit committee meetings and liaise as necessary;
- observe Home Group Scotland’s Board;
- review the business plan and supporting information;
- meet with Home Group Scotland’s senior staff to discuss its business plan, supporting information and any risks to the organisation;
- review the development update and engage as necessary;
- review progress with the plans to address tenant and resident safety issues and engage as necessary; and
- update our published engagement plan in the light of any material change to our planned engagement with Home Group Scotland.
Regulatory Returns
Home Group Scotland must provide us with the following annual regulatory returns and alert us to notifiable events as appropriate:
- Annual Assurance Statement;
- audited financial statements and external auditor’s management letter;
- loan portfolio return;
- five year financial projections; and
- Annual Return on the Charter.
It should also notify us of any material changes to its Annual Assurance Statement, and any tenant and resident safety matter which has been reported to or is being investigated by the Health and Safety Executive or reports from regulatory or statutory authorities or insurance providers, relating to safety concerns.