Major London landlord downgraded to G3 amid ‘serious’ consumer failings

For the consumer grading, the regulator highlighted a “substantial backlog” of more than 2,000 overdue fire safety remediation actions.

“Although actions are being completed at an increased rate, the volume of overdue actions is high, with some overdue by at least 12 months,” the judgement said. 

The RSH also pointed to a “lack of data on whether legal requirements had been met in a large number of third-party-managed buildings”, a repairs backlog and a lack of up-to-date, accurate stock data.

The regulator said there were “serious failings in NHG’s delivery of the outcomes of the consumer standards and significant improvement is needed, specifically in relation to the outcomes in the safety and quality standard”.

The RSH said: “NHG is not meeting its own timescales for the completion of its repairs, maintenance and planned improvements, and this has been a factor in creating a repairs backlog.”

Patrick Franco, chief executive of NHG, described the judgement as “very disappointing”.

He said: “I joined Notting Hill Genesis last year to work alongside dedicated colleagues and improve services for our 130,000 residents, and I am sorry that they are still not getting the service they deserve.

“Today’s regulatory judgement is very disappointing for Notting Hill Genesis, but it confirms the need for us to redouble efforts in our ongoing drive to become a more resident-focused organisation.”

The RSH said the landlord is “working positively with us and acknowledges the concerns found through the inspection”.

“They have begun to deliver the necessary improvements and are making key appointments, as well as working with external advisors, to help address the issues identified in this regulatory judgement.”

Mr Franco said that NHG will “work at pace” with the regulator, “as well as with residents, colleagues and other key stakeholders, to deliver our plan”.

NHG has undergone a series of changes in its leadership team this year. Last week, it made three appointments to newly created roles to help it improve its services, including a chief governance and risk officer. 

Deputy chief executive John Hughes stepped down from his role at NHG in October. 

Earlier this year, the landlord appointed a new chief financial officer. Mark Smith joined in April from NHS Property Services.

Mr Franco added that NHG had made “good progress over the past 12 months” through its Better Together strategy, published in summer 2023.

It sets out the landlord’s three-year plan “to deliver better homes and services for residents”, including a £770m investment in existing homes over the next 10 years.

“Unfortunately, we have not made progress quickly enough to have avoided these non-compliant consumer and governance ratings in this rightly more stringent regulatory environment,” Mr Franco said.

Ian Ellis, chair of NHG’s board, said: “The outcome of our inspection clearly reiterates the need for us to quickly improve the standard of our existing homes, to deliver better outcomes for customers and to continue to implement our new risk management framework.

“Rapidly returning to regulatory compliance and in so doing improving our offer to residents is now the number-one priority for the board.”

Next steps include writing to all residents to apologise that services are not “at the standard they expect or deserve”, NHG said.

The large landlord has also faced financial challenges in the past 18 months. It was forced to temporarily suspend trading for five of its bonds after it filed its audited annual accounts late.

Its overdue accounts revealed a deficit of £90m for 2023-24, an increase of £8m on the £82m deficit it reported in unaudited accounts in June. This was due to “building safety liabilities and asset impairments” of £110m and lower sales figures, it said.

Its most recent half-year results, NHG said it had made “progress” after reporting a post-tax surplus of £37.4m and a 10% increase in turnover.

The only other G15 landlord to be given a consumer rating is Southern Housing, which was handed a C2 in August, and moved to a top grade of G1 for governance.