A property developer with close links to senior Conservative Party has been fined £236,000 after breaching ministry of housing rules.
Platinum Skies, which is chaired by Lord Fink, a Tory peer and former Conservative Party treasurer, has paid Homes England £236,000 after designing unfair leases for older people buying shared-ownership properties.
Platinum Skies, which has received at least £15m in taxpayer subsidies since 2017 to help build shared-ownership retirement flats, was punished for inserting clauses into its leases that making it harder and more expensive for older residents to buy more of their properties.
It transpires that some of the administration fees amounted to tens of thousands of pounds, making it uneconomical for older residents to buy more of their properties and effectively guaranteeing an inflation-linked rental income for the company for the duration of the 125-year leases. The company was selling the rental income streams to investors and they have generated at least £39m for the company so far.
Platinum Skies always denied that the clauses were designed to deter buyers from buying more of their homes, and blamed a “drafting error” for the breach.
When the offending leases were exposed by an investigation in The Times in 2022, Homes England described the clauses as “unacceptable” and a breach of its rules. It promised to sanction the company.
Last month the government agency told The Times that a sanction had been imposed but refused to reveal any more, insisting that the details needed to remain confidential to protect its “commercial interests”.
However, the scale of the fine was then made public by Platinum Skies’s parent company, the Affordable Housing and Healthcare Group, in its annual accounts.
The document said: “The directors assessed the issue, took the necessary legal advice, and rectified the leases. £236,000 was paid to Homes England on 13 February 2024 in relation to this issue.”
The Times reports that at least 180 leases have now been redrawn and that the company has legally committed not to impose the administration fees on the others.
Last year, The Times reported that the family of one elderly buyer of a Platinum Skies flat had been given a bill for £38,000 in fees and charges, despite the buyer having lived in the home for only 25 days before dying. Eventually the company agreed to reduce the debt by £28,000.
Over the years, a network of Conservative politicians and supporters have been involved with Platinum Skies. In 2019 the business paid Sir Conor Burns, then a Tory MP and later a government minister, £12,500 for 36 hours of consultancy work.
The company is based in Bournemouth, where Burns was an MP before losing his seat at this year’s election. Burns was a close ally of Boris Johnson and was made a knight in June 2023 as part of his resignation honours.
The Affordable Housing and Healthcare Group said: “The matter has been concluded. We have taken all necessary steps to prevent any reoccurrence of similar errors in the future. We care deeply about our customers. We continue to work tirelessly to build cherished homes our customers can afford, in supportive communities in which they can thrive.”
Homes England added: “As soon as the issue was brought to our attention, we worked with the company to establish the full extent of the breach and ensure it was remedied as urgently as possible. We are now comfortable that this has been resolved, and have imposed appropriate sanctions.”