A controversial supported exempt housing provider in Birmingham, Ash-Shahada Housing Association, is leaving the city. The London-based provider operates hundreds of properties across Birmingham under the 'exempt housing' model, currently housing up to 3,000 tenants. It has been under investigation for its financial affairs and governance for five years.
The firm has confirmed it is now exiting the city. Affected properties and tenants will be 'transitioned' to new providers, they stated in a press release. Last year, 2025, the housing association claimed a total of £25.5 million in 'enhanced' housing benefits for thousands of people in Birmingham, most placed in former family homes converted into four- or six-unit properties.
Reasons for Exit
Ash-Shahada said: "Ash-Shahada Housing Association has taken the decision to exit the Supported Exempt Accommodation project in Birmingham following a comprehensive, independent strategic review commissioned by its board. The decision is intended to protect the association’s long-term sustainability and reduce regulatory exposure associated with lease-based supported housing models."
The association added: "Ash-Shahada is proud of its legacy in Birmingham, having supported over 50,000 vulnerable residents over the years. The association will work closely with Birmingham City Council and all relevant stakeholders to manage a structured transition focused on minimising disruption and safeguarding residents."
Council Response
Birmingham City Council said: "We are aware of the decision by Ash-Shahada to no longer operate within the city and understand this may cause concern for their partners and for residents living in their accommodation. Safeguarding vulnerable people remains our highest priority, and we will work with all relevant organisations involved to ensure that all individuals affected continue to receive the support and accommodation they need."
Background and Controversy
The firm has a mission statement pledging to help Muslims and people of colour especially to find safe and secure housing. In 2021, the firm was deemed non-compliant by the Regulator for Social Housing, which found several failures relating to its governance and financial viability. The watchdog has been working with the firm since to address the weaknesses, but it remains non-compliant.
Ash-Shahada's chief executive Toaha Qureshi and his son Umar Mahmood, deputy CEO, are currently embroiled in high court action relating to allegations of impropriety over their financial affairs. They deny any wrongdoing. The firm failed to achieve the minimum standards required under the city council's voluntary Quality Standards scheme, launched in 2023, to be an approved provider.
The supported exempt sector has been described as a 'cash cow' and a state-sanctioned scandal by MPs and activists, with Birmingham its epicentre. Earlier this year, major providers in Birmingham like Reliance, the biggest in the city, were able to command £400 a week or more of public money for every needy benefit claimant they housed. In three small streets in Winson Green, Ash-Shahada operated 11 terraced properties, housing 28 claimants, and received £253.69 per tenant per week - a return of around £30,000 a month.
The vast majority of this money then finds its way into private hands through a network of managing agents, property owners and investors, completely legally. The £300 million annual industry in Birmingham has been blamed for driving up crime rates and leading to more family homes being 'flipped' into shared HMO-style properties. There are now over 32,000 people housed in exempt properties across the city, mostly former family homes in deprived areas. Many have mental health issues or are deemed highly vulnerable and share homes with ex-prisoners, addicts and those in recovery.
We have sought further information from the Regulator of Social Housing and the company about its reasons for quitting the city.
