Decision

Grand Union Housing Group Limited (5060) - Regulatory Judgement: 27 November 2024

Updated 27 November 2024

Applies to England

Our Judgement

	Grade/Judgement	Change	Date of assessment
Consumer		Not assessed yet
Governance	G1 Our judgement is that the landlord meets our governance requirements.	Assessed and Unchanged	November 2024
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.	Regrade	November 2024

Reason for publication

We are publishing a regulatory judgement for Grand Union Housing Group Limited (Grand Union) following a stability check review and responsive engagement.

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

Prior to this regulatory judgement, the governance and financial viability grades for Grand Union were last updated in July 2023 following completion of an In Depth Assessment (IDA) to confirm grades of G1 and V1. IDAs were one of our previous assessment processes now replaced by our new regulatory inspections programme from 1 April 2024.

Summary of the decision

Our judgement is that Grand Union meets our governance requirements. From the stability check review, there is no evidence to indicate a change in governance grading is required. Based on this assessment, we have concluded a G1 grade for Grand Union.

Our judgement is that Grand Union meets our financial viability requirements and has the financial capacity to deal with a reasonable range of adverse scenarios. Grand Union’s financial profile reflects the investment it is making in existing tenants’ homes and the development of new homes, meaning that it needs to manage material risks to ensure continued compliance. Based on this assessment, we have concluded a V2 regrade for Grand Union.

How we reached our judgement

We carried out a stability check review to assess whether there are any material risks that may result in a change to Grand Union’s financial viability or governance gradings, as part of our annual stability check programme. We also carried out responsive engagement that focused on Grand Union’s viability grading. The stability check review and responsive engagement were completed in November 2024.

Our regulatory judgement is based on all the relevant information we obtained during the stability check and responsive engagement, as well as analysis of information provided by Grand Union in its regulatory returns and other regulatory activity. This includes financial plans and financial statements and other regulatory returns.

In assessing Grand Union’s governance grade as part of the stability check, our work was limited to verifying that the information contained in its regulatory returns did not appear inconsistent with its existing published governance grade.

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

Summary of findings 

Governance – G1 – November 2024

From the stability check review, there is no evidence to indicate a change in governance grading is required.

Viability – V2 – November 2024

Based on evidence gained from the 2024 stability check review and responsive engagement, we have assurance that Grand Union meets the financial viability requirements of the Governance and Financial Viability Standard and that its financial plans are consistent with, and support, its financial strategy. Grand Union has an adequately funded business plan, sufficient security and is forecast to continue to meet its financial covenants.

Grand Union is investing in improving the quality and energy efficiency of its existing homes and continuing to develop new homes. It is also experiencing increases in the costs of service delivery, including its repairs and maintenance programmes. These factors weaken financial performance when set in the context of economic pressures, impact on Grand Union’s capacity to respond to adverse events. Increasing costs mean that Grand Union is unable to cover interest costs from core activity in the short term and therefore its capacity to withstand downside risks is reduced.

Grand Union has taken measures to increase future financial capacity.

Background to the judgement

About the landlord

Grand Union is a charitable community benefit society focused on the delivery of core landlord services and the provision of new homes. Grand Union was formed as a result of the amalgamation of three housing associations and a non-stock holding parent in 2018.

Grand Union is the only RSH registered entity in the group and has three unregistered subsidiaries:

• Grand Union Homes is a development company that builds homes for sale on the open market for the group;
• GUHG Development Company provides design and build services for members of the group; and
• Grand Union Group Funding plc is the group’s treasury vehicle.

At 31 March 2024, the group owned and managed 12,638 homes across Bedfordshire, Buckinghamshire, Northamptonshire and Hertfordshire. Grand Union reported a turnover of £95m for the year ended 31 March 2024 and employs the full-time equivalent of 381 staff. Grand Union plans to develop around 1,550 homes between 2024 and 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

• Regulating the standards

• Regulatory standards for landlords