Inside Housing – Home – Six downgrades and two upgrades in latest round of regulatory judgements

RSH deputy chief executive Jonathan Walters told Inside Housing this week that the sector should expect V2 to be “the new normal” Look Ahead operates 1,264 homes across London and the South East and manages an extra 1,295 homes for other landlords.
On viability, the RSH said Look Ahead has an “adequately funded business plan and sufficient security in place, however, interest cover ratios are weakened”, while it is amending its operating model to respond to the “negative influence of economic conditions”.
Look Ahead said the downgrade to V2 was “reflective of the current economic challenges facing the sector including interest rate rises, inflation and workforce pressures”.
In its judgement on 8,500-home Fairhive, the regulator said increasing investment in existing homes is weakening the association’s interest cover and reducing funder covenant headroom. 
At the same time, its development programme, which includes homes for sale, is exposing it to housing market risks, the judgement said. 
A statement from Fairhive said: “Our V2 rating reflects the economic challenges that the social housing sector is facing from higher inflation and interest rates and also our commitment to increase the investment in our existing homes whilst delivering high quality new homes to meet the significant housing need in our communities.  
“We have the capacity within our business plan to deliver on all of our objectives and meet our financial commitments.”
Trent & Dove, which operates 6,500 homes mostly across East Staffordshire, is “continuing to deliver its development, regeneration and community support strategies in a more challenging operating environment”, the RSH said.
It added: “This, combined with the increasing costs of investing in existing properties, is weakening financial performance and impacting Trent & Dove’s capacity to respond to adverse events.”
Ursula Bennion, chief executive of Trent & Dove, said: “The regulatory decision to regrade our financial viability to V2 reflects the economic pressures we and other housing providers face across the sector. Trent & Dove remains committed to delivering on our five-year strategic plan focusing on people, purpose and performance.”
Bournville Village Trust’s judgement said its increasing investment in existing homes is “weakening its interest cover”. The 3,700-home landlord’s business plan also includes increasing revenues from non-social housing activities “which exposes it to further risks”.
Pete Richmond, chief executive of Bournville Village Trust, said: “We have set out an ambitious corporate plan to invest tens of millions of pounds in our homes and communities. The tough current economic climate means that delivering our plan will be more challenging. However, we are committed to doing so and to creating and sustaining communities where people can thrive.”
On 3,300-home Brighter Places, the regulator’s judgement said the landlord’s rising investment in existing stock was “weakening its interest cover and reducing headroom on funder covenants”.
It added: “Brighter Places also has a small development programme which exposes it to housing market risks.”
Anna Klimczak, chief executive at Brighter Places, said: “The V2 regrading reflects our commitment to improving and creating affordable housing by investing in our existing homes and building new ones within a challenging economic environment.”



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