Thrive Homes responds to viability regrade

On 30 November 2022, the Regulator for Social Housing issued a series of regulatory judgements including one which saw Thrive’s rating change from G1/V1 to G1/V2

The Regulator has assurance that Thrive Homes Limited (Thrive) “complies with the financial viability elements of the Governance and Financial Viability Standard and that its financial plans are consistent with, and support, its financial strategy. Thrive has an adequately funded business plan, sufficient security and is forecast to continue to meet its financial covenants”.

The judgement that has been released provides further detail on the change stating that, “Thrive needs to manage the material risks arising from its growth strategy including an expanded sales and development programme. It is also increasing investment in its existing homes which weakens its interest cover position and the additional investment spend means Thrive will be partially reliant on income from sales to meet interest costs. In the current economic environment, with uncertainty in relation to wider inflation and interest rate risks, these factors place pressure on financial performance, reducing Thrive’s capacity to respond to adverse events”.

This key rating for the social housing sector, follows an annual stability check which has seen Thrive Homes retain a V1 rating for the past three years. This year’s viability regrade reflects the challenging economic environment and has resulted in similar judgements being issued to other housing associations.

The Regulator’s assessment of Thrive’s compliance with the governance elements of the Governance and Financial Viability Standard remains unchanged. They have concluded that, “there is no evidence to indicate a change to Thrive’s current governance grading. In line with our planned regulatory approach, we will be undertaking an In-Depth Assessment imminently.”

Kate McLeod, Chair of the Board said, “We are delighted to have retained our G1 rating from the Regulator which reflects the good risk management and governance we have in place. The Board and Executive Team continue to take a risk-based approach to decision-making, whilst identifying alternative options as market conditions change. Thrive Homes remains a financially strong and resilient organisation and we are confident in our capacity to continue investing in existing homes and operations whilst achieving our strategy to provide and manage housing that helps people across communities secure a good quality, safe home that they can afford.”

Mark Farrar, Executive Director – Resources said, “We understand the regrade issued by the Regulator as it reflects the challenges of the external environment we are currently operating within coupled with Thrive’s strategic ambitions. As part of the ongoing business planning process Thrive’s Executive Team continues to work closely with Board to develop, and where necessary, adapt its plans whilst monitoring changes to the external environment. Thrive continues to demonstrate its financial resilience underlined by the completion of the recent funding exercise.”

Over the next 10 years, Thrive is focused on increasing housing availability and affordability to meet the demand of a wide range of customers across Hertfordshire, Bedfordshire, Buckinghamshire and Oxfordshire.

For more information about Thrive’s business and ambitions for growth visit www.thrivehomes.org.uk/about-us