Decision

Habinteg Housing Association Limited (LH0459) - Regulatory Judgement: 18 December 2024

Updated 18 December 2024

Applies to England

Our Judgement

	Current grade	Change	Date of assessment
Consumer		Not assessed yet
Governance	G1 Our judgement is that the landlord meets our governance requirements.	Upgrade	December 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.	Assessed and unchanged	December 2024

Reason for publication

We are publishing a regulatory judgement for Habinteg Housing Association Limited (Habinteg) following a stability check and responsive engagement completed in December 2024.

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

In June 2021, following an In Depth Assessment (IDA), we published a regulatory judgement that confirmed Habinteg’s governance grade as G2. IDAs were one of our previous assessment processes now replaced by our new regulatory inspections programme from 1 April 2024.

Prior to this regulatory judgement, the governance and financial viability grades for Habinteg were last updated in November 2022 following a stability check and reactive engagement where we re-graded the financial viability grade to V2 from V1 and confirmed the existing G2 grading.

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

Summary of the decision

Our judgement is that Habinteg meets our governance requirements. Through our responsive engagement, Habinteg has provided evidence to demonstrate that it has strengthened its governance since it was downgraded to G2 in June 2021. We have concluded that this has provided sufficient assurance that Habinteg has made the necessary improvements to now be assessed as a G1 grading.

During the course of our responsive engagement on Habinteg’s governance arrangements, Habinteg carried out a review of its rent setting and compliance with the Rent Standard. It identified some areas for improvement and Habinteg has provided assurance that it is taking action to address these.

Based on the relevant information and evidence we reviewed in carrying out the stability check, our judgement is that Habinteg meets our viability requirements and 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 Habinteg.

How we reached our judgement

In response to the governance downgrade, we carried out responsive engagement with Habinteg that focused on its governance arrangements, including its risk management and control framework, its stress testing and its delivery of value for money (VFM). We also considered how it was meeting the requirements of the Rent Standard and the improvements it has made to its approach to rent setting.

Our responsive engagement included reviewing documents provided by Habinteg, including third party assurance reports. We held discussions with Habinteg, met with its non-executive directors and executive team, and observed a board meeting. Our regulatory judgement is based on all the relevant information we obtained during the stability check and the responsive engagement, together with information provided by Habinteg. This includes financial plans and financial statements and other regulatory returns.

Summary of findings

Governance – G1 – December 2024

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

Habinteg has strengthened its governance arrangements and specifically its risk management and internal control framework. Habinteg’s strategic objectives are aligned with its stated risk appetite, appropriate controls are identified, and assurance is mapped against specific risks. Habinteg has gained assurance, including through external reviews, on the operation of its control environment, systems, processes and on the accuracy of its data underpinning performance reporting. We saw evidence that the board receives appropriate information to manage risk and inform its decision making.

Habinteg’s stress testing and mitigation strategy work has improved in line with regulatory expectations. There are explicit links with its strategic risk register and the impact of sufficiently severe stress tests is considered against Habinteg’s golden rules, the availability of cash and security as well as lender covenants. We saw evidence that this is reported to Habinteg’s board with identified and modelled mitigation strategies that support Habinteg’s board to effectively manage risk and its decision making.

Habinteg has strengthened its focus on VFM in delivering its strategic objectives. Habinteg refreshed its VFM strategy to ensure it supported delivery of its corporate plan. The VFM strategy and corporate plan demonstrate a focus on Habinteg using its financial capacity to deliver its strategic objectives, for example by increasing investment in its existing stock. We saw evidence that Habinteg regularly monitors and reports on its VFM performance and uses this information to inform its decision making.

With the support of third parties Habinteg has reviewed its rent setting processes and the integrity of its rent data to assure itself that properties are correctly classified and that rent levels are accurate. The review identified several areas for improvement, including reimbursement for overpayment where appropriate, and we have assurance that Habinteg is taking action to address these.

Overall, we consider that Habinteg has provided appropriate assurance that it has sufficiently addressed the governance weaknesses we previously identified. Our judgement is that the landlord meets our governance requirements.

Viability – V2 – December 2024

Based on evidence gained from the 2024 stability check, we have assurance that Habinteg’s 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 landlord’s key financial metrics, weakening its interest cover position. When coupled with the current economic environment this reduces Habinteg’s capacity to manage a wide range of adverse scenarios.

Background to the judgement

About the landlord

Habinteg is a charitable community benefit society. Its 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.

According to the 2024 statistical data return Habinteg owns 3,252 homes across 77 local authority areas.

At 31 March 2024 Habinteg employed 139 full-time equivalent staff. Habinteg’s turnover for the year was £26.5m.

Habinteg has one unregistered subsidiary, Holyer Developments Limited. This subsidiary designs and builds properties on behalf of Habinteg. Habinteg plans to develop 184 units by 2031.

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