Regulator upgrades London housing association’s financial viability grading

Local Space has had its financial viability status upgraded by the Regulator of Social Housing, in one of three of new regulatory judgements published today.

The Newham-based association’s financial viability rating has been upgraded from V2 to V1, while its existing G1 grade for governance remains unchanged.

The change in rating comes after the 2,700-home association secured new finance that provides greater certainty regarding its interest costs.

In its previous judgement, the Regulator of Social Housing (RSH) said that the housing provider was exposed to interest cost risk and increased investment in its existing homes had weakened its financial performance.

Local Space was originally formed by the London Borough of Newham in 2006 as an independent vehicle for the acquisition and refurbishment of temporary accommodation. It is registered as a charitable community benefit society. 

Local Space owns a portfolio of around 2,700 homes in London, primarily in the boroughs of Newham, Waltham Forest, Hackney and Tower Hamlets.

The regulator has confirmed Stoke-on-Trent-based housing association Honeycomb Group Limited’s G2 grading for governance and V2 grading for financial viability.

The judgement states that the 3,300-home association has taken measures to increase its financial capacity.

However, the RSH has said that as Honeycomb is increasing investment in its existing homes, in the context of current economic pressures, its capacity to respond to adverse events is impacted.

RSH also said that 4,700-home Estuary Housing Association, which operates from its head office in Southend, has retained its current G2 and V2 gradings.