The report also underlines the work it did during 2023/24 to safeguard and promote the interests of tenants, people who are homeless, and others who use the services of social landlords.

George Walker, the regulator’s chair, said: “The last year has been the most challenging for social housing since SHR was established in 2012. The pressures on social housing are most acute in homelessness.

“Our December update to our earlier thematic review on homelessness stated that some councils are being impacted by systemic failure. Put simply, for some councils, the number of people who are homeless, and the level of need they have, exceed the capacity in the system to respond, particularly the availability of suitable temporary and permanent accommodation.

“Since then, a national housing emergency has been declared by the Scottish Government, and more local authorities have made similar declarations at a local level. We will continue to engage with every local authority about their homelessness services.”

Mr Walker continued: “Many tenants are facing significant financial hardship as a result of the cost-of-living crisis. At the same time, social landlords are dealing with the impact of cost inflation, high interest rates and increasing demands including to build new homes and Net Zero targets.

“Our 2023/24 analysis showed that landlords coped with financial pressures and have continued to perform well against the Scottish Social Housing Charter standards. But, we also reported that RSLs’ financial strength is weakening in the face of the tough economic and operating conditions they are working in. 

“The current context is testing and stretching the resilience, capacity and confidence of social landlords in a way that we have not seen before. And these strains on the system will have other implications for landlords and tenants including a reduction in housebuilding, restrictions on maintenance expenditure, and less being spent on work to support tenants to stay in their homes.

“The coming years are likely to remain unpredictable, volatile and difficult for those who rely on social housing and for those who provide it. We will continue to work with landlords, tenants and all of our stakeholders as we work to tackle the challenges ahead.”

The regulator’s annual report and accounts can be accessed here.