Regulator maintains ‘robust’ financial projection for RSLs but challenging outlook remains
Financial projections for Scotland’s Registered Social Landlords (RSLs) show aggregate financial performance should remain robust over the next five years however RSLs also continue to face a very challenging operating context, a new report by the Scottish Housing Regulator has found.
The report is an overview of the RSL sector’s financial plans as at May 2022 for the next five years.
It shows that RSLs’ were forecasting continued surpluses, and annual growth of 5% on average. They also forecast significant investment in new and existing homes with plans to develop more than 30,000 new homes and invest £1.7 billion in existing homes over the next five years.
The report also notes that the current context for RSLs means that they are likely to have made significant changes to their financial projections and business plans since they submitted them to the Regulator in May.
These factors include the Scottish Government’s intervention on rent setting, the increasing requirements to address the quality of homes, including on energy efficiency and decarbonisation and the ongoing economic uncertainty and volatility including – high inflation, rising interest rates and ongoing supply-chain disruption, including from the war in Ukraine, the lasting long-term impact of Brexit and the Covid-19 pandemic.
Shaun Keenan, assistant director of financial regulation, said: “RSLs continue to work in a complex and uncertain economic landscape. RSLs submitted their projections at a time when the economic outlook remained extremely uncertain and volatile and since then, the outlook has worsened considerably. This will have impacted RSLs’ business plans and is likely to have led to RSLs’ making significant changes to their financial projections since they submitted them to us.
“RSLs continue to face challenges and uncertainty in the national and global economy including significant cost increases, high energy costs, high and increasing interest rates and supply chain disruption and labour scarcity. All whilst continuing to work to deliver on net zero, build back from COVID, and providing new and existing, affordable homes and service for tenants and service users.
“We will continue to work closely with landlords, tenants and all of our stakeholders as we all work to tackle the financial challenges ahead.”