The regulator’s new report on on the annual loan portfolio returns provides an analysis of RSL borrowing at 31st March 2017. It shows that the value of available loan facilities went up by 1.9% to £4.9 billion, of which £628 million remained undrawn by RSLs at the end of the year.

RSLs raised £504 million of new loans during 2016/17 from banks and capital markets. The vast majority was for investment in existing housing and to fund new housing developments. This helps contribute to the Scottish Government’s commitment to deliver 35,000 extra houses for social rent within an overall target of 50,000 affordable homes by 2021.

Shaun Keenan, assistant director of regulation (finance and risk), said “RSLs require competitively priced funding to continue to develop and invest in housing in Scotland. Our recent discussions with lenders and investors indicate that their appetite to invest in the sector remains strong and this is confirmed by our latest analysis.

“Whilst RSLs continue to be able to secure loans at competitive interest rates, recent increases in inflation make higher interest rates more likely. As RSLs continue to borrow to support further investment, it is important that they undertake appropriate sensitivity analysis to understand the potential impact of variations in interest rates on loan covenants and financial projections.”