Decision

Current regulatory judgement: Believe Housing Limited (27 September 2023)

Updated 27 September 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Believe Housing Limited

• Regulatory code: 5071

• Publication date: 27 September 2023

• Governance grade: G1

• Viability grade: V2

• Reason for publication: Changed basis for viability grade

• Regulatory route: In Depth Assessment

Regulatory judgement

This regulatory judgement confirms our existing assessment of Believe Housing Limited’s governance and financial viability grades (G1/V2) following completion of an In Depth Assessment (IDA).

Based on evidence from the IDA, the regulator has assurance that Believe Housing Limited (Believe) continues to comply with the financial viability elements of the Governance and Financial Viability Standard. Its financial plans are consistent with, and support, its financial strategy. Believe has an adequately funded business plan with sufficient security in place and forecasts to continue meeting its financial covenants.

Believe is increasing its investment in existing homes, while continuing to develop new homes. Its forecast plan includes some sales exposure. Coupled with the current economic uncertainty in relation to inflation and interest rates, these factors reduce Believe’s capacity to respond to adverse scenarios.

The regulator’s assessment of Believe’s compliance with the governance elements of the Governance and Financial Viability Standard remains unchanged. Based on the evidence gained from the IDA, the regulator has assurance that Believe’s governance arrangements enable it to adequately control the organisation and to continue meeting its objectives.

Other providers included in the judgement

None

About the provider

Origins

Believe is a charitable community benefit society and group parent. It was formed in 2015 to take a transfer of the remaining housing stock of Durham County Council. Its principal strategic focus is the management and maintenance of its homes.

Registered Entities

Believe is the only registered entity.

Unregistered Entities

Believe has one wholly owned unregistered subsidiary, Believe Developments Limited, which delivers its development programme.

Believe Developments Limited holds a 50% interest in two joint ventures: Believe Carlton MSG LLP and Believe Carlton Witton LLP. The joint ventures will be used to deliver the group’s development programme between 2027 and 2028, including units built for sale.

Geographic Spread and Scale

Believe owns and manages around 18,000 homes, the majority of which are in County Durham.

Staffing and Turnover

At 31 March 2023, Believe employed 601 full-time equivalent staff and had turnover of £73.4m.^{[footnote 1]}

Development

Up to the end of its current development strategy in 2026, Believe aims to develop around 1,150 units in County Durham, predominantly for affordable rent.

About our judgements

Key to Grades

Governance:

	Compliant
G1	The provider meets our governance requirements.
G2	The provider meets our governance requirements but needs to improve some aspects of its governance arrangements to support continued compliance.

	Non-compliant
G3	The provider does not meet our governance requirements. There are issues of serious regulatory concern and in agreement with us the provider is working to improve its position.
G4	The provider does not meet our governance requirements. There are issues of serious regulatory concern, and the provider is subject to regulatory intervention or enforcement action.

Viability:

	Compliant
V1	The provider meets our viability requirements and has the financial capacity to deal with a wide range of adverse scenarios.
V2	The provider meets our viability requirements. It has the financial capacity to deal with a reasonable range of adverse scenarios but needs to manage material risks to ensure continued compliance.

	Non-compliant
V3	The provider does not meet our viability requirements. There are issues of serious regulatory concern and, in agreement with us, the provider is working to improve its position.
V4	The provider does not meet our viability requirements. There are issues of serious regulatory concern, and the provider is subject to regulatory intervention or enforcement action.

Note: The use of an asterisk (*) against a grade indicates that the assessment refers to a provider that is designated as being for-profit.

Definitions of Regulatory Routes

In Depth Assessment (IDA): An IDA is a bespoke assessment of a provider’s viability and governance, including its approach to value for money. It involves on-site work and considers in detail a provider’s ability to meet its financial obligations and the effectiveness of its governance structures and processes.

Stability Checks: Based primarily on information supplied through regulatory returns, a Stability Check is an annual review of a provider’s financial position and its latest business plan. The review is focused on determining if there is evidence to indicate a provider’s current judgements merit reconsideration.

Reactive Engagement: Reactive engagement is unplanned work which is triggered by new information or a developing situation which may have implications for a provider’s current regulatory judgement.

Stability Checks and Reactive Engagement: In some cases, we will publish narrative regulatory judgements which combine evidence gained from both Stability Checks and Reactive Engagement.

For further details about these processes, please see Regulating the Standards.

1. Based on unaudited accounts for 2022/23 ↩