Lease-based provider that fought non-compliant status eyes 5,000-home target
A lease-based provider that took the English regulator to court over its non-compliant status has reported a 74% jump in surplus and is aiming to have 5,000 homes under management.
Inclusion Housing, which currently has a G3/V3 rating from the Regulator of Social Housing (RSH), recorded a post-tax surplus of £2.5m in the year to 31 March 2021, up from £1.45m the year before.
Turnover was up around a quarter at £46.6m.
The York-based provider, which operates in the specialist supporting housing sector, made headlines two years ago when it launched an unprecedented High Court legal challenge against the RSH. Inclusion argued that the regulatory judgement deeming it non-compliant for governance and financial viability was “legally flawed” and “irrational”.
But the High Court rejected Inclusion’s judicial review, and it later emerged that the provider had to pay £337,000 in legal costs to the regulator.
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In the 2019-20 financial year, Inclusion admitted that its operating margin had been affected by “exceptional legal costs” without directly referring to the case.
However, in its most recent full-year the not-for-profit provider reported an operating margin of 6.7%, up from 4.7% in the 2019/20 financial year.
A growing number of lease-based providers have been found non-compliant in the past few years as the RSH has expressed concerns over the sub-sector.
At the time of the regulatory judgement on Inclusion, which was published in February 2019, the regulator said the provider was working with it to improve its position.
When contacted by Inside Housing this week for an update on the situation, an RSH spokesperson said: “Inclusion are currently G3/V3 and are working with us to improve their position.”
Inclusion said it had 3,036 homes in management as of the end of March 2021 and brought 550 properties into management in the year. As of the end of last month, it had 3,301 homes in management. It operates across around 100 local authority areas.
The provider has grown quickly from having just 1,285 units in 2016/17.
“Our focus is on the future and we want to grow the number of units in management to 5,000,” Inclusion said in accounts published on Companies House.
However, it said that its projection is for “slower future growth” over the next two years as it moves towards that target.
When contacted by Inside Housing, Inclusion said: “Inclusion Housing is pleased to report its sixth consecutive year of best ever financial results – with an increased surplus, strong cash flow and augmented positive balance sheet. Our 2021/22 financial accounts are expected to report a seventh consecutive year of financial success.”
It did not comment on the current situation with the regulator.
Inclusion launched in 2007 and registered with the RSH in 2011.
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