We held the third meeting of the year of the Systemically Important landlord group.

We refer to a small number of Registered Social Landlords (RSLs) as Systemically Important (SI) because of their stock size, turnover, or level of debt, or because of their significance within their area of operation.

This blog sets out the main points from the conversation. We discussed: the ongoing housing emergency, some updates on the implementation of our new regulatory framework, progress with the consultation on the Annual Return on the Charter, and the upcoming annual risk assessment.

Helen Shaw, our Director of Regulation, also highlighted the opportunity this meeting provided to reflect on the significant challenges facing the housing sector. With the new regulatory framework now eight months in, it was also an opportunity to hear feedback from RSLs on how the new framework was working. We also discussed our planned report on Notifiable Events (NEs), which has now been published and gives landlords insight into the types of incidents being reported and how we have handled them.

One of the main areas of discussion centred on the ongoing housing emergency. While there was agreement that the issue was pressing, there was a sense that the declaration had become more symbolic than actionable and there was an urgent need for a coherent, strategic plan. The dramatic rise in homelessness was clearly straining the housing system, and the group were of the view that clear guidance and policy responses were required to address the challenges associated with this. The focus on bringing void properties back into use was noted.

The group discussed the potential request for additional data collections from landlords to monitor progress on issues such as voids and concerns about the value and effectiveness of such data. The group told us it would place a disproportionate burden on landlords at a time when they are already stretched. The group also highlighted that voids are often typically held for legitimate reasons and that properties are usually let as quickly as possible despite some significant challenges. This led to a broader discussion on the limitations of the social housing sector, which only accounts for 22% of the housing stock in Scotland. The group was clear that solving homelessness requires a collaborative approach that includes more than just RSLs.

The group discussed our analysis of RSLs’ Five-Year Financial Projections, as well as our recent publication on the annual Loan Portfolio of RSLs. While new borrowing had decreased, liquidity within the sector remained strong. However, there was a sense of caution from the group around the sector’s financial health. The group noted that we are engaging with more RSLs than ever before about their finances. It voiced concerns that, while RSLs had kept rent increases below inflation in recent years to protect tenants, this practice was becoming unsustainable. Rising insurance costs and national insurance increases, following the UK budget announcement, would also add significant financial pressure on the sector in the near future.

The group also reflected on the difficulty of achieving better value for money (VFM) in the future. Many of the “low-hanging fruit” had already been harvested, and future savings would likely require larger investments—particularly in technology. However, these investments wouldn’t necessarily yield immediate savings. Some landlords felt many VFM efforts had already gone as far as they could and that this may mean that the sector needs to consider how and whether further efficiencies can be delivered.

Concerns were raised regarding the time it was taking to get some key policy and funding decisions. This was making it increasingly difficult for RSLs to plan effectively, especially in the critical area of achieving net zero targets.

As part of the ongoing discussions, the group addressed the proposed changes to the Annual Return on the Charter (ARC) indicators, offering their insights and concerns. The group welcomed the opportunity for input but emphasised that any proposed changes must be proportionate to avoid unnecessary additional work and costs. They highlighted that even minor changes to systems could come with significant expenses for landlords, who were already facing pressure. There was also concern about the proposed simplification of classifications for damp and mould, fearing that it might result in more cases being flagged without truly warranting action or creating health risks.

Members agreed to reconvene in February 2025 with a continuing focus on the pressing challenges that lie ahead for the sector.