Nine housing associations re-issued with ‘V2’ financial viability grade following stability checks

The Regulator of Social Housing has released the first set of this year’s annual stability check results, re-issuing most providers with a ‘V2’ rating for financial viability and the top ‘G1’ grading for governance.

Today, the regulator published stability check results for 11 housing associations, with nine receiving a ‘V2’ rating, signaling  they have adequate financial capacity but need to manage material risks carefully. A total of 10 associations were also re-issued with the top ‘G1’ rating for governance (see table below).

Oxfordshire-based registered provider, Cottsway Housing Association, had its ‘V1’ grading reconfirmed in the Regulator of Social Housing’s (RSH) annual stability check. A ‘V1’ grade means a landlord meets viability requirements and has the financial capacity to deal with a wide range of adverse scenarios.

Stonewater also received a ‘V1’ grading based on how it is meeting the viability outcomes of the RSH’s governance and financial viability standard.

The housing associations that had their ‘V2’ gradings confirmed include Bournemouth Churches Housing Association, Empowering People Inspiring Communities, Longhurst Group, Worthing Homes and Hightown Housing Association.

>> See also: Regulator of Social Housing issues top ‘C1’ grading to a council for the first time

>> See also: Regulator warns of ‘little margin for error’ as HAs’ debt servicing costs exceed net earnings

Fairhive Homes, Framework Housing Association, Housing Plus and Nehemiah United Churches Housing Association also maintained ‘V2’ grades.

The regulator carries out stability checks on all housing associations, and other private registered providers, who own 1,000 homes or more.

As part of the checks, the regulator looks at the financial information landlords have submitted, including their most recent business plan and annual accounts, and consider whether their current viability grade is consistent with this. 

Last month, the RSH published its latest sector risk profile report, revealing that registered providers’ average interest cover—a measure of financial capacity comparing earnings to interest payments—has dropped below 100% for the first time in 15 years.

The regulator’s most recent global accounts report, published in December last year, noted that continued high levels of investment in the existing housing stock and the economic conditions have led to the sector as a whole being stretched and financial resilience being tested.