Our Judgement

	Grade/Judgement	Change	Date of assessment
Consumer		Not assessed yet
Governance	G1 Our judgement is that the landlord meets our governance requirements.	Upgrade	February 2025
Viability	V2 Our judgement is that the landlord 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.	Assessed and unchanged	February 2025

Reason for publication

We are publishing a regulatory judgement for Flagship Housing Group Limited (Flagship) following a stability check and responsive engagement completed in February 2025. 

This regulatory judgement confirms a governance upgrade to G1 and a financial viability grading of V2. 

In July 2023, following an In-Depth Assessment (IDA), we published a regulatory judgement that downgraded Flagship’s governance grade to G2 and confirmed its viability grade as V2. IDAs were one of our previous assessment processes now replaced by our new regulatory inspections programme from 1 April 2024.

We have not yet assessed this landlord against the consumer standards.

Summary of the decision

Our judgement is that Flagship meets our governance requirements. Through our responsive engagement, Flagship has provided evidence to demonstrate that it has strengthened its governance since it was downgraded to G2 in July 2023. We have concluded that Flagship has provided assurance that it has made the necessary improvements to now be assessed as a G1 grading. 

Based on the information and evidence we reviewed in carrying out the stability check, our judgement is that Flagship 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. We have therefore issued a V2 for Flagship. 

How we reached our judgement 

In response to the governance downgrade, we carried out responsive engagement with Flagship that focused on its governance arrangements, including its risk management and control framework and board oversight of business and financial planning. 

Our responsive engagement included reviewing documents provided by Flagship, including third party assurance reports, and internal documents relating to business planning and risk management. We also held discussions with Flagship’s executive team. 

Our regulatory judgement is based on all the relevant information we obtained during the stability check and responsive engagement, together with information provided by Flagship. This includes financial plans and financial statements and other regulatory returns.

Summary of findings   

Governance – G1 – February 2025 

Based on the evidence gained from the stability check and our responsive engagement, we have assurance that Flagship’s governance arrangements enable it to effectively manage its risks and adequately control the organisation, allowing it to deliver its objectives. 

Flagship has strengthened its governance arrangements, specifically its risk management and internal control framework as well as aspects of its financial governance arrangements. 

Flagship has improved its stress testing and mitigation strategies to meet our governance requirements. This includes considering the impact of sufficiently severe stress testing against its golden rules, lenders’ covenants and headroom. We saw evidence that this is reported to Flagship’s board with identified and modelled mitigation strategies that support the board in its decision making and risk management. These improvements have strengthened the board’s oversight and ability to assess and respond to any presenting challenges and changes in its financial position. 

Flagship has also reviewed the effectiveness of its corporate and governance structures, simplifying these to enable greater board efficiency and oversight. It has also revised its tenant engagement framework to strengthen the tenant voice within its governance structure. 

Viability – V2 – February 2025 

Based on evidence gained from the 2024 stability check, we have assurance that Flagship’s financial plans are consistent with, and support, its financial strategy. Flagship has an adequately funded business plan, sufficient security in place, and is forecast to continue to meet its financial covenants under a reasonable range of adverse scenarios.  

Flagship has material risks and exposures that it needs to manage. It continues to increase investment in its existing homes while delivering a significant development and sales programme and is reliant on sales surpluses to remain compliant with covenants. Delivery of this investment reduces Flagship’s covenant headroom and coupled with increases to inflation and interest rates in recent years, impacts its capacity to respond to adverse events. 

Background to the judgement

About the landlord

Flagship is an exempt charitable community benefit society.  

Flagship has four active unregistered subsidiaries and five dormant subsidiary companies. 

The group is based and operates in the East of England. Flagship owns and manages 33,372 homes. It reported a turnover of £253m for the year ended 31 March 2024 and employs the full time equivalent of 1,467 staff. Flagship plans to develop 2,900 units by the end of March 2029. 

Our role and regulatory approach

We regulate for a viable, efficient, and well governed social housing sector able to deliver quality homes and services for current and future tenants.

We regulate at the landlord level to drive improvement in how landlords operate. By landlord we mean a registered provider of social housing. These can either be local authorities, or private registered providers (other organisations registered with us such as non-profit housing associations, co-operatives, or profit-making organisations).

We set standards which state outcomes that landlords must deliver. The outcomes of our standards include both the required outcomes and specific expectations we set. Where we find there are significant failures in landlords which we consider to be material to the landlord’s delivery of those outcomes, we hold them to account. Ultimately this provides protection for tenants’ homes and services and achieves better outcomes for current and future tenants. It also contributes to a sustainable sector which can attract strong investment.

We have a different role for regulating local authorities than for other landlords. This is because we have a narrower role for local authorities and the Governance and Financial Viability Standard, and Value for Money Standard do not apply. Further detail on which standards apply to different landlords can be found on our standards page. 

We assess the performance of landlords through inspections and by reviewing data that landlords are required to submit to us. In Depth Assessments (IDAs) were one of our previous assessment processes, which are now replaced by our new inspections programme from 1 April 2024. We also respond where there is an issue or a potential issue that may be material to a landlord’s delivery of the outcomes of our standards. We publish regulatory judgements that describe our view of landlords’ performance with our standards. We also publish grades for landlords with more than 1,000 social housing homes.

The Housing Ombudsman deals with individual complaints. When individual complaints are referred to us, we investigate if we consider that the issue may be material to a landlord’s delivery of the outcomes of our standards.

For more information about our approach to regulation, please see Regulating the standards. 

Further information