Derby City Council

Mackworth residents threatened with eviction as they are not vulnerable enough.

The 7 residents at Park View flats in Mackworth are on the verge of eviction. The arrangement, led by the new owners, Henley Investment Management Ltd, need them out, as they are not vulnerable enough!

The overall business proposition, which includes the supported housing provider My Space Housing Solutions, relies on the tenants having learning/physical disabilities in order to provide lucrative returns to wealthy City investors, from government backed housing benefits. They need to evict the current tenants and bring in more vulnerable people.

“to provide a long-term, secure income stream to investors”…from housing benefits for vulnerable adults

“provider of high quality housing services to vulnerable adults”

Henley’s say that they are not responsible for “pulling the trigger” to evict the existing tenants.  They say it’s My Space Housing Solutions … My Space say it’s not them either!

To feed their investors returns, someone needs to evict the tenants, but neither wants the “stain on their hands”.

Meanwhile, 7 people are anxious and left feeling vulnerable about their future…leaving Derby City Council, and the local tax payer, with the task and cost of re-housing them.

Background

Park View flats were sold in October 2018 to 2 Jersey based companies as trustees of Henley Secure Income Property Unit Trust (SIPUT) – part of Henley Investment Management Ltd based in London.

Park View was originally part of the wider Derby Homes housing stock being the much sought after 1 person accommodation. In 2018, Derby City Council tried to buy the property, but were substantially outbid by Henley’s.

Henley SIPUT was established a few years ago “to provide a long-term, secure income stream to investors, generated from assets with long-term leases which include annually inflation-linked rental income”. Their website goes on to say:

“Specifically, the Fund focuses on acquiring residential accommodation for vulnerable adults, including individuals with learning disabilities, physical disabilities or mental health conditions. Each property has a long-term lease in place with a Registered Provider (“RP”) who is responsible for housing and tenancy management. The RP’s sign service level agreements or care operator nominations agreements with care operators, who are responsible for providing care for the service users.”

It has been reported that the returns will be of the order of 5% pa.

Reported in Inside Housing magazine 9/8/2017


The Registered Provider in the case of Park View is My Space Housing Solutions. They describe themselves as a “provider of high quality housing services to vulnerable adults“, and:

Evictions?

On 10th October 2018 Henley’s signed a 20 year lease with My Space Housing Solutions. According to Henley’s, My Space has full day to day responsibility for the property, the tenants and, by implication the eviction process to gain “vacant possession”

 

There is a 3rd organisation – Enabling Homes LtdThis organisation, served the notice of eviction (s21) on behalf of My Space. Enabling Homes is a “property developer”. The Managing Director, Paul O’Rourke has, reportedly described himself as the “owner” of Park View.  He seems to be the public face of the eviction process – describing Enabling Homes on the formal paperwork as the “Landlord’s Agent” – despite this Enabling Homes do not have the legal position to execute the eviction

The 1st s21 eviction notice was issued in October 2018 and was subsequently withdrawn due to “media attention”.  On BBC East Midlands Today, My Space dodged their responsibilty, and was quoted as saying

“The status of a development at the point of purchase is handled by the developers and investors that My Space leases buildings from – any vacant possession orders are administered by those companies rather than by My Space itself”

How do Henley’s make money out of vulnerable people?

Standard housing benefits are subject to “benefit caps”. Supported living for vulnerable people is defined as “exempt accommodation” and much higher rents can be charged and therefore much higher housing benefits received from the Government. The basis for this is that the provider incurs much higher costs in delivering the support service. There is scope for a substantial surplus between the income claim, and the actual costs of delivering the support.

In an Inside Housing artice from 25 Sep 2018: “Further investment fund to have leases with under-investigation association revealed”, there are specific references to Henley’s and the business proposition:

“Typically, homes are leased to housing associations who collect the rents from tenants and repay them to the funds – delivering an inflation-linked return to investors.

The funds tend to target supported housing accommodation where rents are paid through housing benefit and guaranteed by the local authority.

Henley, in a typical offering for funds of this type, promises investors a 5% annual return over the 25-year life of the lease.”

In a later Inside Housing article from 22 March 2019: “Private finance and supported housing: an investigation” summed the position up succinctly

“Landlords that provide specialist supported housing (SSH) are permitted by government to charge far higher rents than for other social tenures, all paid by the taxpayer through housing benefit. These are often far in excess even of market rents in the area.

But what if all that extra public money isn’t being spent on providing vital care to extremely vulnerable tenants?”

It goes on to say:

Richard Graham, MP for Gloucester, tells Inside Housing: “The tenants, almost by definition, of supported housing, are not the people best equipped to look into what providers are supposed to provide and monitor it and complain.”

Mr Graham, who was involved in the investigation, explains that through various different routes, the council was able to determine that the agreed level of care was not being provided.

He adds: “What you’ve got is a system where one side of the operations is buying up cheapish property as quickly as possible, turfing out the tenants and then bidding for supported housing contracts, which hugely enhances their yield without doing a great deal to provide that support.”

 

And to cap it all, the lease costs are fixed, irrespective of the number of tenants, and the occupancy rate which puts pressure on the Registered Provider. This leads to dilution of their service and the potential for going bust….which was the case with First Priority ( who also had connections with Henley’s)

“At stake are the homes of 759 of the UK’s most vulnerable adults, including many with learning difficulties, brain injuries or physical and mental disabilities. If things go wrong, warns one investor, these people could be “out on their ear”.

The Regulator of Social Housing is particularly concerned about My Space Housing Solutions as it has now been put on the “Gradings Under Review” list.

 

“The RSH said it was investigating a matter regarding the landlord’s governance and financial viability that could result in it being downgraded to a non-compliant grade.”

Comment

The 7 residents at Park View are pawns in a lucrative financial enterprise wrapped up as an investment opportunity with a social conscience.

If Henley’s were funding the build of new housing capacity, or the conversion of redundant buildings specifically for vulnerable people, then that would be worthy of celebration. Details of what percentage of Henley’s investments fall into this category was not forthcoming.

The 3 parties involved are less than transparent over who is “pulling the trigger” on evictions.

Henley’s ( owner of the freehold and “superior landlord”) are very clear – it’s not them.

  • Henley’s have a lease ( dated 10 October 2018) in place with My Space Housing.  Stuart Savidge, the MD of Henley’s SIPUT, stated
    • Under the terms of that lease, My Space Housing Solutions are responsible for all day to day management of the property;

      Henley SIPUT has no input in to operational decisions, including which tenants live in the property;

  • The lease however is NOT registered with the Land Registry ( after 2 years), it is PENDING. Henley’s accept that they are in the “Registration Gap” period. It is their view that, the pending status does not change who has responsibility for the eviction process
    • According to Birkett’s Solicitors:
      • “Legal title of registered land to a property does not pass to the buyer until the transfer or new lease is registered at the Land Registry.”

      • “The difficulty to the purchaser landlord is the inability to serve notices (i.e. a notice to quit or a break notice) on the tenants while their registration is pending and they are not yet a legal owner (being an owner in equity). This is going to inhibit the landlord and their dealings with the site during the registration gap period.”

    • This suggests that My Space cannot serve the formal possession order as they don’t have full legal title, yet. Perhaps it will fall back to Henley’s to “pull the trigger”?!

My Space Housing Solutions, don’t think it’s their job:

  • “The status of a development at the point of purchase is handled by the developers and investors that My Space leases buildings from – any vacant possession orders are administered by those companies rather than by My Space itself”

  • When I tried to clarify the position with My Space they chose not to comment

Paul O’Rourke of Enabling Homes stated on the 17th October 2018

  • “…it is ultimately myself (Paul O’Rourke) responsible for this matter and Enabling Homes, actually not the actions of My Space although they are the future intended Landlord”

  • By this time, My Space Housing Solutions had signed a lease and, as far as Henley’s were concerned, My Space was the landlord…not a “future intended” landlord.
  • Enabling Homes have served the most recent s21 notice which ended on 10th October 2020.
  • Paul O’Rourke can’t serve the possession order as neither he, nor Enabling Homes, have  legal title.

Why the ambiguity? 

As the ultimate owner, Henley’s should take full responsibility.  They have a duty of care, moral if not legal, over all of the consequences of their investment and business proposition. They cannot simply “wash their hands” of the fact that 7 people are being threatened with eviction simply so their investors can make a healthy return.

When I expressed this view to Stuart Savidge, MD of Henley SIPUT he responded:

“Your assertion that “evictions were being pursued on your behalf directly, or indirectly” and “are required to support the return to your investors” is totally incorrect and a gross misrepresentation of the facts. Our business is committed to providing long term housing to vulnerable adults and works with housing associations and local authorities across the UK. We currently provide housing to over 1,600 people nationally with an average lease length of just under 25 years.”

The business model is beyond dispute, and the only reason why the tenants are being threatened with eviction is because of the arrangement that Henley’s engineered.

Totally incorrect? Gross misrepresentation? Or perhaps the stark reality of the situation is too shameful to accept?

POSTSCRIPT

In my opinion this is a very unseemly affair. Any corporate body should have a genunine concern over what happens in their supply chain and make every effort to ensure that it is ethical. In some cases where the supply chain is complex, that is difficult.  With Henley’s business model, that is easy.

Their investors should know, positively, and transparently, that people have / have not been evicted as a necessary requirement of delivering their healthy returns.

Perhaps Henley’s should accept that they have made a mistake in this case – re-negotiate the lease, or even sell the property to Derby City Council, where it can be best managed in the interests of the tax paying residents of Derby, and not for the benefit of faceless wealthy investors, making money on the back of other people’s misery.

2 replies »

  1. This is a fine piece of journalism Russell and exposes a nasty loophole in the system. I would be very interested to know what the “service users” think of the service they are getting.

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