Decision

Current regulatory judgement: Gateway Housing Association Limited (13 December 2023)

Updated 13 December 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Gateway Housing Association Limited
• Regulatory code: L0517
• Publication date: 13 December 2023
• Governance grade: G1
• Viability grade: V1
• Reason for publication: Viability regrade
• Regulatory route: Stability Check and Reactive Engagement

Regulatory judgement

This regulatory judgement regrades our previous published assessment of Gateway Housing Association Limited’s financial viability from V2 to V1 and confirms its existing G1 grade for governance.

The regulator has assurance that Gateway Housing Association Limited (Gateway) complies with the financial viability elements of the Governance and Financial Viability Standard and that its financial plans are consistent with, and support, its financial strategy. Gateway has an adequately funded business plan, sufficient security, and is forecast to continue to meet its financial covenants.

Our previous judgement noted that increasing planned investment in existing homes, including on fire and building safety and energy efficiency work, had a detrimental impact on interest cover. Alongside potential further spending on energy efficiency works and economic uncertainty in relation to inflation and interest rate risks, this reduced Gateway’s capacity to deal with adverse scenarios.

Gateway’s forecast interest cover profile has now strengthened, informed by recent stock condition surveys and the clarification of liabilities for required fire and building safety work. This increases Gateway’s capacity to deal with adverse scenarios.

The regulator’s assessment of Gateway’s compliance with the governance elements of the Governance and Financial Viability Standard remains unchanged. On the basis of the Stability Check, the regulator has concluded that there is no evidence to indicate a change to Gateway’s current governance grading.

Other providers included in the judgement

None

About the provider

Origins

Gateway is a charitable community benefit society. Its core business is the provision of general needs and low cost home ownership housing.

Registered Entities

Gateway is the only registered entity in the group.

Unregistered Entities

There are two subsidiaries within the group, Gateway Living Limited and Victoria Park Housing Developments Limited.

Geographic Spread and Scale

Gateway owns and manages around 3,100 homes in East London with homes located in the London boroughs of Tower Hamlets, Hackney and Newham.

Staffing and Turnover

The group employs 111 full-time equivalent staff. Group turnover for the year ended 31 March 2023 was £31.5m.

Development

Gateway plans to develop 426 affordable rent and low cost ownership homes by 2029.

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.