Decision

Arhag Housing Association Limited (LH3811) - Regulatory Judgement: 25 March 2026

Updated 25 March 2026

Applies to England

Our Judgement

Reason for publication

We are publishing a regulatory judgement for Arhag Housing Association Limited (Arhag) following responsive engagement and an investigation relating to potentially serious governance and financial viability failings.

As a result of our investigation, we have concluded that Arhag is not delivering the required outcomes of the Governance and Financial Viability Standard.

As Arhag owns fewer than 1,000 social homes, it is a small landlord. We do not issue grades to small landlords and only publish or update regulatory judgements where we consider there to be serious weaknesses or failings in a landlord’s delivery of the outcomes of our standards.

Summary of the decision

From the evidence gained during our investigation, it is our judgement that Arhag has failed to manage its resources effectively. It faced significant liquidity issues putting social homes at risk. Its business planning, risk and control framework was not appropriate, robust or prudent. There have been significant gaps in financial reporting and board oversight which have resulted in an insolvency risk. We have concluded that Arhag is not delivering the required outcomes of the Governance and Financial Viability Standard.

How we reached our judgement

The landlord informed the regulator in November 2026 that it was in an acute financial position. We began responsive engagement and in December 2025 Arhag was added to our Gradings under Review list while we carried out our investigation.  

Our regulatory judgement is based on analysis of all the relevant information we obtained during the investigation and responsive engagement.

Summary of findings  

Our Governance and Financial Viability Standard sets out that landlords are expected to manage their affairs with an appropriate degree of skill, prudence and foresight. Landlords must manage their resources effectively to ensure their viability is maintained and that social housing assets are not put at undue risk. 

Arhag demonstrated a lack of oversight by the board that has resulted in the approval of unrealistic budgets and long-term financial plans and under investment in existing homes. This has led to poor financial performance during 2025. Arhag has not ensured an appropriate, robust and prudent business planning, risk and control framework and has failed to ensure it has sufficient access to liquidity at all times. Stress testing of Arhag’s 2025 long term financial plan was inadequate and an appropriate mitigation plan to address potential financial risks was not in place. 

Arhag did not ensure accurate and comprehensive financial reporting and as a result it failed to monitor cashflow performance. At the end of November 2025, it became apparent that its existing funding facilities were not accessible due to a combination of ineligible expenditure and forecasted covenant breaches. This led to an immediate liquidity crisis.   

The interim chief executive, appointed in November 2025, and the board took prompt action in response, implementing immediate cost controls. Accepting an independent future was not possible, Arhag sought partnership with a financially resilient landlord to ensure social housing assets and tenants remained in the sector.

Following tenant consultation and due diligence, Arhag’s board approved the decision to merge and from 1 April 2026 it intends to become a subsidiary of Hyde Group.

Our focus has been to work with Arhag to ensure social homes and tenants are protected and insolvency averted. Arhag has worked with us and developed a plan with its proposed merger partner to resolve the issues identified and to help Arhag meet its objectives which are to deliver good quality homes and services to its tenants. 

Background to the judgement

About the landlord

Arhag owns 908 homes, the majority of which are general needs, with a small proportion of supported housing, shared ownership and leasehold. Arhag owns two properties that are over 18 metres high and three homes between 11 and 18 metres.

Arhag’s homes are located across 15 local authority areas, the majority of which are in London.

At the year ended 31 March 2025, Arhag’s turnover was £8.1m.andit employed 21 full-time equivalent staff.

Arhag intends to join Hyde Group from 1 April 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 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