In a regulatory judgement the Regulator of Social Housing (RSH) concluded that Octavia Housing (Octavia) has breached the economic standards and, as a result, it has been downgraded to V3 / G3 status.

RSH said that it lacks assurance that Octavia’s financial resources and systems are adequate. These issues have led to the provider producing poor-quality and untimely financial data and setting unrealistic budgets.

RSH also lacks assurance that Octavia has a robust financial plan that it is capable of delivering. Its financial performance has been weaker than budgeted and this has impacted its performance against its loan covenants.

Octavia is working to address the governance and financial viability issues identified by RSH’s investigation, in order to ensure its long-term financial viability.

Harold Brown, senior assistant director for investigations and enforcement, said: “We found significant issues with Octavia’s financial planning, as well as a failure by its Board to have appropriate oversight of the organisation. We expect Octavia to address these issues promptly and return to compliance with our standards.”

In a statement to its residents, Octavia Housing said: “This downgrading will not affect services to residents nor the communities we serve.

“Please be assured we’re committed to taking the necessary steps to improve and we have already taken a number of steps to strengthen our organisation.

“We will be including more information on the steps we’re taking in light of the RSH’s decision in our next Resident Update, due to be published at the start of October.

“We operate in some of the most expensive parts of the capital, and we are proud of our legacy of creating good quality, affordable homes. This year, we’ve built 70 new affordable homes, helping more residents be independent, make connections in the community and thrive, and we will continue to make these investments.”