Decision

Previous regulatory judgement: Yorkshire Housing Limited (5 July 2023)

Updated 29 November 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Yorkshire Housing Limited
• Regulatory code: L4521
• Publication date: 5 July 2023
• Governance grade: G1
• Viability grade: V2
• Reason for publication: Changed basis for viability grade
• Regulatory route: In Depth Assessment

Regulatory judgement

This regulatory judgement confirms the regulator’s existing G1/V2 assessment of Yorkshire Housing Limited’s governance and financial viability, following completion of an In Depth Assessment (IDA).

The regulator has assurance that Yorkshire Housing Limited (YH) is compliant with the financial viability elements of the Governance and Viability Standard and that its financial plans are consistent with, and support, its financial strategy. YH has an adequately funded business plan, sufficient security and is forecast to continue to meet its financial covenants.

YH has a significant development and sales programme, including shared ownership and market sale through a material investment in a commercial subsidiary. This exposes YH to a range of market conditions and means that it is susceptible to the crystallisation of housing and economic risks. The scale of planned development also increases the level of debt it needs to service. When coupled with the current economic environment in relation to inflation and interest rates, these factors reduce YH’s capacity to deal with adverse scenarios.

The regulator’s assessment of YH’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 YH’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

YH is a charitable community benefit society, a registered provider and the stock holding parent of the group.

Registered Entities

YH is the only registered entity in the group.

Unregistered Entities

There are two active wholly owned unregistered entities within the group. Y H Residential Limited (YHR) undertakes the group’s outright sale and market rent activity and Yorkshire Housing Finance PLC is the group’s treasury vehicle.

YHR has a 20% shareholding of Forge New Homes LLP, a joint venture with other registered providers to undertake outright sales and planning policy compliant affordable homes, and a 33% share in Yorkshire Transformation Holdings Limited, which is delivering a Private Finance Initiative through its subsidiary Yorkshire Transformation Limited.

Geographic Spread and Scale

The group operates throughout Yorkshire.

It owns and manages around 18,000 homes. The majority of its homes are general needs for social rent, but it also provides homes for intermediate rent, housing for older people, shared ownership, market rent, rent to buy and supported housing

Staffing and Turnover

The group employs the full-time equivalent of 799 staff and its turnover for the year ended 31 March 2023 was £145.7m.^{[footnote 1]}

Development

YH’s business plan includes development of 8,000 new homes by 2033, with 4,179 already completed or secured.

About our judgements

Key to Grades

Governance:

	Compliant
G1	The provider meets our governance requirements.
G2	The provider meets our governance requirements but needs to improve some aspects of its governance arrangements to support continued compliance.

	Non-compliant
G3	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	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:

	Compliant
V1	The provider meets our viability requirements and has the financial capacity to deal with a wide range of adverse scenarios.
V2	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.

	Non-compliant
V3	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	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.

Note: The use of an asterisk (*) against a grade indicates that the assessment refers to a provider that is designated as being for-profit.

Definitions of Regulatory Routes

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.

1. Based on unaudited accounts for 2022/23. ↩