Engagement plan from 31 March 2022 to 30 March 2023

Landlord name

Loretto Housing Association Ltd

Publication date

31 March 2022

Regulatory status

Compliant

The RSL meets regulatory requirements, including the Standards of Governance and Financial Management.

This landlord is a subsidiary of Wheatley Housing Group. You can read the engagement plan for Wheatley Housing Group and all of its subsidiaries below. 

Why we are engaging with Wheatley Housing Group (WHG)

We are engaging with WHG about planned organisational change, its  development plans and because it is a systemically important landlord.

WHG has six registered subsidiaries: Cube Housing Association Ltd (Cube), Dumfries and Galloway Housing Partnership (DGHP), Dunedin Canmore Housing Ltd (Dunedin Canmore), Glasgow Housing Association Ltd (GHA, trading as Wheatley Homes Glasgow), Loretto Housing Association Ltd (Loretto) and West Lothian Housing Partnership Ltd (WLHP).

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. We consider WHG to be systemically important.  We also consider DGHP, Dunedin Canmore and GHA to be systemically important in their own right, due to a combination of their size, turnover and level of debt.

WHG is progressing plans for restructuring the group.  WHG consulted Cube’s tenants about proposals to transfer engagements to GHA and Loretto.  Cube’s tenants voted in favour of the transfers which took place in July 2021.  Cube will seek removal from the Register of Social Landlords (the Register) in 2022.  GHA will progress the small transfer of engagements from Strathclyde (Camphill) Housing Society Ltd (Strathclyde Camphill).

WHG is the largest developer of new affordable housing in Scotland and plans to continue to grow by building around 3,600 affordable homes over the next five years.  The group’s development programme is spread across its subsidiaries and includes homes for social rent, mid-market rent and low cost home ownership.  WHG will receive significant public subsidy to help achieve this.

What WHG must do

WHG must:

  • provide copies of its Board and audit committee minutes as they become available;
  • send us by 30 April 2022 for the group and registered subsidiaries:
    • its approved business plans and updated risk registers;
    • 30 year financial projections consisting of statement of comprehensive income, statement of financial position and statement of cash flow complete with assumptions and explanatory narrative;
    • a comparison of projected financial loan covenants against current covenant requirements;
    • financial sensitivity analysis which considers the key risks, the mitigation strategies for these risks and a comparison of the resulting covenant calculations with the actual current covenant requirements; and
    • the report to the Board in respect of the approved 30 year projections, sensitivity analysis and covenant compliance;
  • send us by 30 April 2022 for its non-registered subsidiaries:
    • the approved business plans
    • the financial projections consisting of statement of comprehensive income, statement of financial position and statement of cash flow complete with assumptions and explanatory narrative; and
    • financial sensitivity analysis which considers the key risks, the mitigation strategies for these risks and a comparison of the resultant covenant calculations with the actual covenant requirements;
  • meet with us quarterly and send us updates prior to our meetings;
  • send us an update on its development plans by 31 October 2022. This will  include 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 updates on its proposals for organisational change, including an application for the removal of Cube from the Register and updates on progress with the transfer of engagements of Strathclyde Camphill.

What we will do

We will:

  • review the minutes of the Board and audit committee meetings and engage as necessary;
  • review the business plans, financial projections and supporting information;
  • meet with WHG’s senior staff quarterly to discuss the business plan, the financial information and any risks to the organisation;
  • observe a WHG Board and a DGHP Board meeting;
  • review the development update and engage as necessary;
  • engage with WHG about its proposals for organisational change, including the removal of Cube from the Register and the transfer of engagements from Strathclyde Camphill; and
  • update our published engagement plan in light of any material change to our planned engagement with WHG.

Regulatory returns

Wheatley 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.

Our lead officer for Wheatley Housing Group Ltd is:

Kirsty Porter

Regulation Manager