Previous regulatory judgement: North Devon Homes (16 December 2020)
Updated 13 December 2023
Applies to England
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RSH Narrative Regulatory judgement
- Provider: North Devon Homes
- Regulatory code: LH4249
- Publication date: 16 December 2020
- Governance grade: G1
- Viability grade: V2
- Reason for publication: Viability regrade
- Regulatory route: In Depth Assessment
This regulatory judgement regrades our previous assessment of North Devon Homes’ financial viability following an In Depth Assessment (IDA).
The regulator has assurance that North Devon Homes (NDH) complies with the financial viability element of the Governance and Viability Standard and that its financial plans are consistent with, and support, its financial strategy. NDH has an adequately funded business plan, sufficient security, and is forecast to continue to meet its financial covenants.
NDH does, however, face exposure to the housing market, including a reliance on receipts from open market sales and shared ownership sales. Its underlying financial performance is weak and NDH is reliant on surpluses from sales to make an overall surplus over forthcoming years. This increased exposure reduces NDH’s capacity to manage adverse events.
The regulator’s assessment of NDH’s compliance with the governance elements of the Governance and Financial Viability Standard remains unchanged. Based on the evidence gained from the IDA, the regulator has assurance that NDH’s governance arrangements enable it to adequately control the organisation and to continue meeting its objectives.
Other providers included in the judgement
None
About the provider
Origins
NDH is a charitable company limited by guarantee formed to receive the transfer of stock from North Devon Council. Its core activities are the provision of affordable rented accommodation, housing services, and the development of new affordable homes, and homes for market sale.
Registered Entities
NDH is the only registered entity.
Unregistered Entities
NDH has a wholly owned commercial trading subsidiary, Anchorwood Limited. It supports the objectives of NDH with the provision of new homes for sale.
Geographic Spread and Scale
NDH manages 3,300 properties in North Devon.
Staffing and Turnover
As at 31 March 2020, NDH employed 123 full time equivalent staff. Group turnover for the year ending 31 March 2020 was £20.9m.
Development
NDH’s development programme over the next four years aims to deliver over 130 new homes, mainly comprising affordable rent and shared ownership. In addition, Anchorwood Limited has a four year development programme to deliver about 110 market sales and around 30 affordable units.
About our judgements
Key to Grades
Governance:
- G1 (Compliant): The provider meets our governance requirements
- G2 (Compliant): The provider meets our governance requirements but needs to improve some aspects of its governance arrangements to support continued compliance
- G3 (Non-compliant): The provider does not meet our governance requirements. There are issues of serious regulatory concern and in agreement with us the provider is working to improve its position.
- G4 (Non-compliant): The provider does not meet our governance requirements. There are issues of serious regulatory concern and the provider is subject to regulatory intervention or enforcement action.
Viability:
- V1 (Compliant): The provider meets our viability requirements and has the financial capacity to deal with a wide range of adverse scenarios.
- V2 (Compliant): The provider 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.
- V3 (Non-compliant): The provider does not meet our viability requirements. There are issues of serious regulatory concern and, in agreement with us, the provider is working to improve its position.
- V4 (Non-compliant): The provider does not meet our viability requirements. There are issues of serious regulatory concern and the provider is subject to regulatory intervention or enforcement action.
Definitions of Regulatory Processes
In Depth Assessment (IDA): An IDA is a bespoke assessment of a provider’s viability and governance, including its approach to value for money. It involves on-site work and considers in detail a provider’s ability to meet its financial obligations and the effectiveness of its governance structures and processes.
Stability Checks: Based primarily on information supplied through regulatory returns, a Stability Check is an annual review of a provider’s financial position and its latest business plan. The review is focused on determining if there is evidence to indicate a provider’s current judgements merit reconsideration.
Reactive Engagement: Reactive engagement is unplanned work which is triggered by new information or a developing situation which may have implications for a provider’s current regulatory judgement.
Stability Checks and Reactive Engagement: In some cases, we will publish narrative regulatory judgements which combine evidence gained from both Stability Checks and Reactive Engagement.
For further details about these processes, please see ‘Regulating the Standards’.