Why we are engaging with Kingdom Housing Association (Kingdom)
We are engaging with Kingdom about its development plans, planned organisational changes 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 Kingdom’s level of debt we consider it to be systemically important.
Kingdom 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 will receive significant public subsidy to help achieve this. The number of affordable homes provided by Kingdom will increase by around one quarter over the next five years.
Following a successful ballot of its tenants, Fairfield Housing Association (Fairfield) transferred its engagements to Kingdom on 1 December 2021 and was removed from the Register of Social Landlords on 29 March 2022. Since then we have monitored the progress of the integration of Fairfield into Kingdom and the delivery of the commitments Kingdom has made to Fairfield’s tenants and service users.
What Kingdom must do
- provide copies of its Board and audit committee minutes as they become available;
- send us an update on its development programme by 31 October 2023. 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
- provide quarterly updates on progress with the delivery of the commitments Kingdom has made to Fairfield’s tenants and service users.
What we will do
- review the minutes of the Board and audit committee meetings and liaise as necessary;
- observe Kingdom’s Board;
- review the development update and engage as necessary;
- engage as necessary on the delivery of the commitments Kingdom has made to Fairfield’s tenants and service users; and
- update our published engagement plan in the light of any material change to our planned engagement with Kingdom.
Kingdom 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.