Decision

Karbon Homes Limited (4846) - Regulatory Judgement: 24 September 2025

Updated 24 September 2025

Applies to England

Our Judgement

	Grade/Judgement	Change	Date of assessment
Consumer	C2 Our judgement is that there are some weaknesses in the landlord delivering the outcomes of the consumer standards and improvement is needed.	First grading	September 2025
Governance	G1  Our judgement is that the landlord meets our governance requirements.	Assessed and unchanged	September 2025
Viability	V1  Our judgement is that the landlord meets our viability requirements and has the financial capacity to deal with a wide range of adverse scenarios.	Assessed and unchanged	September 2025

Reason for publication

We are publishing a regulatory judgement for Karbon Homes Limited (Karbon) following an inspection completed in September 2025.  

This regulatory judgement confirms a consumer grade of C2, a governance grade of G1 and a financial viability grade of V1. 

Prior to this regulatory judgement, the governance and financial viability grades for Karbon were last updated in December 2024 following a stability check which confirmed grades of G1 and V1. This is the first time we have issued a consumer grade in relation to this landlord. 

Summary of the decision

From the evidence and assurance gained during the inspection it is our judgement that there are some weaknesses in how Karbon is delivering the outcomes of the consumer standards and improvement is needed, specifically in relation to outcomes in the Safety and Quality Standard and Transparency, Influence and Accountability Standard. Based on this assessment, we have concluded a C2 grade for Karbon. 

Our judgement is that Karbon meets our governance requirements. Karbon has provided evidence to demonstrate the effectiveness of its governance arrangements and that it continues to effectively manage the risks of its activities, allowing it to deliver its strategic and charitable objectives. Based on this assessment, we have concluded a G1 grade for Karbon. 

Our judgement is that Karbon meets our financial viability requirements and has the financial capacity to deal with a wide range of adverse scenarios. Karbon has a strong financial profile, and its stress testing demonstrates that financial capacity is built into its business plan. Karbon has provided appropriate assurance that it has access to sufficient liquidity and adequate funding in place. Based on this assessment, we have concluded a V1 grade for Karbon. 

How we reached our judgement

We carried out an inspection of Karbon to assess how well it is delivering the outcomes of the consumer standards and meeting our governance and financial viability requirements, as part of our planned regulatory inspection programme. During the inspection we considered all four of the consumer standards: Neighbourhood and Community Standard, Safety and Quality Standard, Tenancy Standard and the Transparency, Influence and Accountability Standard. 

During the inspection we observed a board meeting, spoke to tenants, held meetings with Karbon including with its non-executive directors and reviewed a wide range of documents provided by Karbon.  

Our regulatory judgement is based on all the relevant information we obtained during the inspection as well as analysis of information supplied by Karbon through its regulatory returns and other regulatory engagement activity.   

Summary of findings 

Consumer – C2 – September 2025 

During the inspection, Karbon provided evidence-based assurance that it has appropriate systems in place to ensure the health and safety of its tenants in their homes and associated communal areas. We saw evidence that Karbon keeps an accurate record of the condition of its homes at an individual property level through physical surveys, and has a process for keeping this information up to date and ensuring its accuracy. Karbon demonstrated that it uses its understanding of the quality and safety of its tenants’ homes to make decisions on future investment to maintain and improve its homes.    

Karbon demonstrated a focus on improving the timeliness and effectiveness of its repairs service. This work is ongoing, with further time required to show sustained improvements, particularly in relation to repairs timeframes. We will continue to work with Karbon as it strengthens this area. Karbon has demonstrated that it takes the views of its tenants into account when planning improvements to the service.  

We gained assurance that Karbon treats its tenants with fairness and respect and provides a range of opportunities for tenants to influence Karbon’s strategies, policies and services, with effective scrutiny arrangements in place. Karbon is undertaking work to enhance its understanding of the diverse needs of its tenants and we will continue to work with Karbon as it strengthens its approach in this area. 

We saw evidence that Karbon provides a range of relevant and accessible information to tenants, including about its performance. Karbon’s approach to complaints handling is clear and in line with the requirements of the Transparency, Influence and Accountability Standard.

Governance – G1 – September 2025

Based on evidence reviewed through our inspection, we gained assurance that Karbon’s governance arrangements enable it to effectively manage its risks and adequately control the organisation, allowing it to deliver its objectives.  

Karbon’s board has a clear corporate plan and strategies, and during the inspection we saw evidence that these are regularly reviewed to ensure it is delivering against its organisational purpose. 

Karbon provided evidence that roles, responsibilities and accountabilities within its leadership and governance structure are well defined and effective. The relationship between the board and committees is working in line with its delegations to strengthen assurance in key areas of risk and compliance. Board member skills, experience and knowledge are appropriate for the activities of the organisation, and there is a structured and organised approach to both succession planning and skills appraisal for board members.    

We saw evidence of continuing governance improvement through annual effectiveness reviews and in-depth periodic external governance reviews. The most recent external review took place in 2024, and we saw evidence that the recommendations of that review have been implemented.  

Karbon demonstrated that there is an appropriate risk management and control framework in place that aligns to its strategic risks. We saw evidence that this is overseen by the board and that risks are being managed effectively in practice. 

We saw evidence of board ownership of stress testing and mitigation strategies, and how this is used to inform decisions, supplementing the wider control framework. Reporting to board provides sufficient detail to ensure effective oversight.  

Viability – V1 – September 2025

Based on evidence gained through the inspection, we have concluded there is appropriate assurance that Karbon’s financial plans are consistent with, and support, its financial strategy. We saw evidence that Karbon has an adequately funded business plan, sufficient security in place to support its financial plans, and is forecast to continue to meet its financial covenants under a wide range of adverse scenarios. Karbon’s board has effective oversight of covenant compliance with actual and projected covenant performance monitored and regularly reported to the board. 

Karbon has a strong financial profile, with financial capacity built into its business plan and with strong levels of forecast loan covenant headroom. Karbon forecasts adequate interest cover while continuing to deliver its development programme and investing in its existing stock to meet both decarbonisation and stock quality aims. 

Background to the judgement

About the landlord

Karbon is the parent company of a group currently comprising two other registered providers: 54 North Homes Limited and Leazes Homes Limited.

At 31 March 2025, Karbon employed 1,105 full-time equivalent staff. Turnover for the year ended 31 March 2025 was £219m.

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