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Our JudgementÌý

	Grade/Judgement	Change	Date of assessment
Consumer	C2 Our judgement is that there are some weaknesses in the landlord delivering the outcomes of the consumer standards and improvement is needed.	First grading	June 2025
Governance	G2 Our judgement is that the landlord meets our governance requirements but needs to improve some aspects of its governance arrangements to support continued compliance.	Downgrade	June 2025
Viability	V2 Our judgement is that the landlord meets our viability requirements. It has the financial capacity to deal with a reasonable range of adverse scenarios but needs to manage material risks to ensure continued compliance.	Regrade	June 2025

Reason for publicationÌý

We are publishing a regulatory judgement for Southway Housing Trust (Manchester) Limited (Southway) following an inspection completed in June 2025.Ìý

This regulatory inspection confirms a consumer grade of C2, a governance grading of G2, and a financial viability grading of V2.Ìý

Prior to this regulatory judgement, the governance and financial viability gradings for Southway were last updated in January 2025, following a stability check which confirmed grades of G1 and V1. This is the first time we have issued a consumer grade in relation to this landlord.Ìý

Summary of the decisionÌý

From the evidence and assurance gained during the inspection, it is our judgement that there are some weaknesses in Southway’s delivery of the outcomes of the consumer standards and improvement is needed, specifically in relation to our Safety and Quality Standard and our Transparency, Influence and Accountability Standard. Based on this assessment we have concluded a C2 grade for Southway.Ìý

Our judgement is that Southway meets our governance requirements but needs to improve some aspects of its governance arrangements to support continued compliance. Specifically, improvements are needed in how the board assures itself around the delivery of outcomes of the Safety and Quality Standard, and the Transparency, Influence and Accountability Standard. Based on this assessment, we have concluded a G2 grade for Southway.Ìý

Our judgement is that Southway meets our financial viability requirements and has the financial capacity to manage a reasonable range of adverse scenarios. Southway has a number of financial risks that need to be managed due to increased investment in its existing homes and its development programme, which includes homes for outright sale. Southway has provided appropriate assurance that it has access to sufficient liquidity and has adequate funding in place. Based on this assessment, we have concluded a V2 grade for Southway.Ìý

How we reached our judgementÌý

We carried out an inspection of Southway to assess how well it is delivering the outcomes of the consumer standards and meeting our governance and financial viability standards, as part of our planned regulatory inspection programme. During the inspection, we considered all four of the consumer standards: Neighbourhood and Community Standard, Safety and Quality Standard, Tenancy Standard, and the Transparency, Influence and Accountability Standard.Ìý

During our inspection we observed a board meeting and a tenant scrutiny panel meeting, spoke with tenants, held meetings with Southway including with non-executive directors, and reviewed a wide range of documents provided by Southway. Our regulatory judgement is based on a review of all the relevant information we obtained during the inspection as well as analysis of information received from Southway through its regulatory returns and other regulatory engagement activity.Ìý

Summary of findingsÌýÌýÌý

Consumer – C2 – June 2025ÌýÌýÌý

In relation to the Safety and Quality Standard, Southway provided evidence-based assurance that it has appropriate systems in place to ensure the health and safety of tenants in their homes and communal areas. Southway demonstrated it has a good understanding of its compliance with landlord health and safety requirements and has identified areas for improvement in its reporting to the board. We have evidence that the board has oversight over fire safety and the fire risk assessment programme and there is appropriate assurance that Southway is managing risk in these areas. The performance information Southway routinely reports demonstrates a good level of compliance, and the board has suitable oversight of the compliance position.ÌýÌý

There is evidence that Southway has a programme in place to gain an accurate and up to date record of the condition of its homes through physical surveys and has a process in place to keeping this information up to date. However, Southway needs to improve the coverage of the information it holds on the condition of its homes at an individual level. At the time of our inspection there was evidence of progress but the proportion of homes that have had a recent physical survey remains low, and Southway was not able to fully demonstrate sufficient understanding of the condition of its homes from physical stock assessments.ÌýÌý

Southway needs to continue to drive improvement so that it has an effective, efficient and timely repairs, maintenance and planned improvements service. We saw evidence that changes made by Southway are having an impact, including reducing a recent repairs backlog, but more work is needed for Southway to meet its own targets on timescales for the completion of repairs. Southway has identified that weaknesses in how it communicates with tenants is a driver for complaints and dissatisfaction. As part of its response to this, Southway is seeking to improve how it communicates the status of repairs with its tenants.Ìý

In relation to the Transparency, Influence and Accountability Standard, Southway’s own review has identified weaknesses in its complaints service. Changes have been made to improve complaints handling performance, and Southway has put arrangements in place so that it learns from complaints to support service improvement and positive outcomes for tenants.ÌýÌý

To fully meet the requirements of the Transparency, Influence and Accountability Standard, Southway needs to improve the range of meaningful opportunities for tenants to influence and scrutinise Southway’s strategies, policies and services. Southway has taken action to increase ways in which tenants can be involved, and there is some evidence that insight from tenants is considered in decision making on policies and services. However, Southway needs to improve how tenants’ views are considered within its governance structure and at board level.Ìý

We saw evidence that Southway treats tenants with fairness and respect. Action is taken to deliver fair and equitable outcomes for tenants, and Southway takes their diverse needs into account. Southway also provides tenants with accessible information about its performance and landlord services although this information could be updated in a more timely way. Southway is working to improve how it uses the information it holds about its tenants to tailor services to meet individual needs.Ìý

In relation to the Neighbourhood and Community Standard, we gained assurance that Southway works in partnership with relevant organisations to deter and tackle anti-social behaviour (ASB) and hate incidents in the neighbourhoods where it provides social housing.ÌýÌý

Southway has demonstrated that, in relation to the Tenancy Standard, it works in partnership with local authorities to ensure a consistent approach to lettings and that its homes are let in a fair and transparent way. We saw evidence that Southway understands the diverse needs of its tenants and the communities it operates in and through the tenure mix in the development of new homes. We have assurance that Southway considers tenants’ diverse needs in the design and delivery of services, and that it monitors its performance in continuing to deliver outcomes to tenants in this area.Ìý

Governance – G2 – June 2025Ìý

Based on the evidence gained from the inspection, there is assurance that Southway’s governance arrangements are meeting the requirements of the Governance and Financial Viability Standard. However, we have concluded that it needs to improve aspects of its governance arrangements to support continued compliance.Ìý

Southway has a risk management and control framework that aligns to its strategic risks. In order for the framework to be effective in all risk areas, Southway needs strengthen its approach so that the board can demonstrate sufficient challenge and oversight of the risks to delivering its purpose and strategic objectives.ÌýÌýÌý

Southway’s board has demonstrated that there is consideration of alternative options to deliver value for money and make best use of resources in its approach to developing its strategy.ÌýÌý

There is a need for Southway’s board to demonstrate it seeks assurance that governance arrangements are aligned with the risks associated with strategic delivery. This includes managing and mitigating the performance of non-social housing activities, reviewing skills and capacity, and making sure there is a robust evidence base for strategic decision making. Southway’s board needs to keep under review the extent to which the delivery of its strategy is delivering value for money in meeting the requirements for investment in existing and new homes.ÌýÌý

The quality of reporting to Southway’s board, including through escalation from delegated committees, has not always been sufficient to identify underperformance and drive improvement. Southway’s board has demonstrated that it actively seeks and gains an appropriate level of assurance across a range of areas, however there are some areas where implementation of improvements has taken longer than expected. This includes the programme of stock condition surveys across all homes, but also in some of the actions to resolve issues with the effectiveness of the repairs and maintenance service.ÌýÌý

Through the inspection we saw evidence that Southway has taken action to increase the pace of its improvement plans. Southway has also identified that some improvement is needed to make sure the board is getting the level of assurance required, in particular in areas of landlord health and safety.Ìý

Through the inspection we found that there is evidence of effective oversight of Southway’s financial position and effectiveness of governance in managing its viability risks. Board ownership of stress testing and mitigation strategies is evidenced and is used to inform decisions, supplementing the wider control framework.ÌýÌý

Continuing governance improvement is evidenced through annual effectiveness reviews and in depth periodic external governance reviews. The most recent external review took place in January 2025, and its recommendations have been considered and agreed by Southway’s board. The delivery of a governance improvement plan is underway, which includes a review of board skills and succession planning, committee effectiveness in providing assurance to the board, and how tenants’ views are considered in board decision making. Ìý

Viability – V2 – June 2025 Ìý

Based on the evidence gained from the inspection, we have assurance that Southway’s financial plans are consistent with, and support, its financial strategy. Southway has an adequately funded business plan, sufficient security in place, and is forecast to continue to meet its financial covenants under a reasonable range of adverse scenarios.Ìý

Southway forecasts positive operating margins, though its forecast financial profile is weaker than in previous years due to Southway increasing its investment in existing homes while continuing to develop an increased supply of new homes. This includes the generation of surpluses from the sale of homes on the open market. Southway’s existing homes will require significant long-term investment to meet energy efficiency targets, although the detailed impact on its financial plans is pending the completion of its physical stock condition surveys. These exposures will need to continue to be managed as these factors restrict the capacity Southway has available to respond to a wide range of financial risks.Ìý

We have assurance that Southway has reporting and oversight mechanisms in place to manage the identified risks and to track financial performance. However, when set in the context of economic pressures, the above factors impact on Southway’s capacity to respond to adverse events.Ìý

Background to the judgementÌý

About the landlordÌý

Established in 2007, Southway is the parent of its group, with two wholly owned subsidiaries.ÌýÌý

Southway owns and manages around 6,700 homes in the North West. The majority of its homes are general needs with a small number of shared ownership, supported housing for older people, and market rent.Ìý

The group employs the full-time equivalent of 297 staff. Its turnover for the year ended at 31 March 2025 was £42m.ÌýÌý

Southway plans to develop around 1,300 new homes between 2025 and 2030.Ìý

Our role and regulatory approachÌý

We regulate for a viable, efficient, and well governed social housing sector able to deliver quality homes and services for current and future tenants.ÌýÌý

We regulate at the landlord level to drive improvement in how landlords operate. By landlord we mean a registered provider of social housing. These can either be local authorities, or private registered providers (other organisations registered with us such as non-profit housing associations, co-operatives, or profit-making organisations).ÌýÌý

We set standards which state outcomes that landlords must deliver. The outcomes of our standards include both the required outcomes and specific expectations we set. Where we find there are significant failures in landlords which we consider to be material to the landlord’s delivery of those outcomes, we hold them to account. Ultimately this provides protection for tenants’ homes and services and achieves better outcomes for current and future tenants. It also contributes to a sustainable sector which can attract strong investment.ÌýÌý

We have a different role for regulating local authorities than for other landlords. This is because we have a narrower role for local authorities and the Governance and Financial Viability Standard, and Value for Money Standard do not apply. Further detail on which standards apply to different landlords can be found on our standards page.Ìý

We assess the performance of landlords through inspections and by reviewing data that landlords are required to submit to us. In Depth Assessments (IDAs) were one of our previous assessment processes, which are now replaced by our new inspections programme from 1 April 2024. We also respond where there is an issue or a potential issue that may be material to a landlord’s delivery of the outcomes of our standards. We publish regulatory judgements that describe our view of landlords’ performance with our standards. We also publish grades for landlords with more than 1,000 social housing homes.Ìý

The Housing Ombudsman deals with individual complaints. When individual complaints are referred to us, we investigate if we consider that the issue may be material to a landlord’s delivery of the outcomes of our standards.Ìý

For more information about our approach to regulation, please see Regulating the standards.Ìý

Further informationÌýÌý