Decision

Your Housing Group Limited (L4203) - 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.	Upgrade	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.	Assessed and unchanged	November 2024

Reason for publication

We are publishing a regulatory judgement for Your Housing Group Limited (YHG) following a stability check review, and responsive engagement completed in November 2024.

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

Prior to this regulatory judgement, the governance and financial viability grades for YHG were last updated in June 2022, following an In-Depth Assessment (IDA), to confirm grades of G2 and V2. IDAs were one of our previous assessment processes, now replaced by a programme of regulatory inspections from 1 April 2024.

In June 2022 following a review of rent and service charge setting YHG identified wide ranging errors and made a self-referral. Following investigation, we concluded that YHG had not complied with the Rent Standard 2020 or the legislative requirements of the Welfare Reform and Work Act 2016 and we set our findings in a regulatory notice. In February 2024, we removed the regulatory notice when we concluded that we had sufficient assurance that YHG had addressed the issues in the regulatory notice dated June 2022 in relation to rent setting. 

We have not issued a consumer grading for this landlord.

Summary of the decision

From the evidence and assurance gained through the stability check review and responsive engagement our judgement is that YHG meets our governance requirements. YHG has provided evidence to demonstrate that it has strengthened its governance arrangements since June 2022. We have concluded that this has provided sufficient assurance that YHG has made the necessary improvements to be assessed as a G1 grading.  

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

How we reached our judgement

We carried out responsive engagement that focused on YHG’s governance arrangements and a stability check review to assess whether there are any material risks that may result in a change to YHG’s financial viability gradings. 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 YHG in its regulatory returns and other regulatory activity. This includes financial plans and financial statements and other regulatory returns. We also had discussions with YHG’s board and executive directors and observed a board meeting as part of our landlord improvement activity.

Summary of findings  

Governance – G1 – November 2024

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

YHG has strengthened its governance arrangements. Changes in leadership have added organisational capacity and improved the oversight and management of risks and the wider control environment. In particular, the management of key financial risks. YHG has evidenced it has made changes to its finance function, with improved management oversight. A financial transformation plan has been delivered to increase YHG’s capacity and financial expertise alongside implementing data and process improvements. We saw evidence of an improved control environment and in February 2024 YHG provided evidence that it has addressed the issues relating to the rent standard that were summarised in the regulatory notice dated June 2022 when we concluded that we had sufficient assurance to remove the regulatory notice.

Overall, we consider that YHG 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 – November 2024

Based on evidence gained from the 2024 stability check, we have assurance that YHG’s financial plans are consistent with, and support, its financial strategy. YHG 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. Forecast covenant headroom on the group’s tightest interest cover covenant will need to be managed carefully to ensure continued compliance.

YHG’s recent financial performance indicates it has delivered a sustainable financial position throughout a period of economic uncertainty. It continues to forecast a positive operating margin though its financial profile is weaker than in previous years. In the short to medium term, YHG plans to continue with significant investment in its current homes, including building safety works, and is also developing new homes.

YHG anticipates surpluses from the sale of some of its properties, including homes developed for sale. While it is not reliant on these sales for covenant compliance, they represent a risk to delivering the planned financial position. We have assurance that YHG has reporting and oversight in place to manage the risks of its sales programme.

When set in the context of economic pressures the above factors impact on YHG’s capacity to respond to adverse events.

Background to the judgement

About the landlord

YHG is an exempt charity registered under the Co-Operative and Community Benefit Societies Act 2014. It is a registered provider of social housing and the non-asset holding parent of the group.

YHG has two registered subsidiaries. Your Housing Limited is the principal operating subsidiary and is a charitable community benefit society formed in July 2017, following group consolidation. Frontis Homes Limited is a non-charitable community benefit society.

YHG has two active non-registered subsidiaries. Nuvu Development Limited is a property development company. Nuvu Living LLP, a property partnership, is 99.99% owned by YHG and 0.01% by Nuvu Development Limited.

The group is based in Warrington and operates across the North West, Yorkshire and the Midlands. YHG owns and manages around 26,500 properties, the majority are general needs properties with the remainder including affordable rent, supported housing, retirement living, key worker and shared ownership housing.

At 31 March 2024, the group employed 982 full-time equivalent staff. Group turnover for the year ended 31 March 2024 was £199.3m. YHG plans to develop 1,244 units by the end of 2026.

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