Decision

Current regulatory judgement: Habinteg Housing Association Limited (30 November 2022)

Updated 30 November 2022

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Habinteg Housing Association Limited
• Regulatory code: LH0459
• Publication date: 30 November 2022
• Governance grade: G2
• Viability grade: V2
• Reason for publication: Viability regrade
• Regulatory route: Stability Check and Reactive Engagement

Regulatory judgement

This judgement regrades our previous published assessment of Habinteg Housing Association Limited’s financial viability from V1 to V2 and confirms its existing G2 grade for governance.

The regulator has assurance that Habinteg Housing Association Limited (Habinteg) 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. Habinteg has an adequately funded business plan, sufficient security, and is forecast to continue to meet its financial covenants.

Habinteg is increasing investment in its existing homes. This investment has a material impact on the provider’s key financial metrics, weakening its interest cover position. When coupled with the current economic environment including inflationary and interest rate pressures, this reduces Habinteg’s capacity to manage a wide range of adverse events.

The regulator’s assessment of Habinteg’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 Habinteg’s current governance grading.

In our previous regulatory judgement for Habinteg, published in June 2021, we concluded that the provider needed to strengthen elements of its risk management and internal controls assurance framework, its stress testing and its delivery of value for money.  Habinteg has subsequently developed a governance improvement plan which it is progressing.

Other providers included in the judgement

None

About the provider

Origins

Habinteg is a charitable community benefit society. Its main focus is the delivery of housing and related services that ensure that people with disabilities have access to homes that meet their needs and enable them to live independently.

Registered Entities

Habinteg is the only registered entity.

Unregistered Entities

Holyer Developments Limited is a wholly owned company limited by guarantee set up to develop properties for Habinteg.

Geographic Spread and Scale

Habinteg operates across England and Wales. It owns and manages around 3,400 homes, across 83 different local authority areas.

Staffing and Turnover

Habinteg employs 88 full-time equivalent staff. Its turnover for the year ended 31 March 2022 was £23.3m.

Development

Habinteg is a Homes England investment partner and aims to develop 190 homes by 2025-26 for affordable and social 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.

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.