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Scottish social landlords forecast 5% growth but face ‘challenging’ outlook
Scottish social landlords are forecasting an annual growth of 5% on average, according to a new report by the Scottish Housing Regulator (SHR).
In the report, an overview of landlords’ financial plans and forecasts for the next five years, the regulator said that their aggregate financial performance should remain robust, but they “continue to face a very challenging operating context”.
And the regulator said that since the plans were submitted in May, the outlook has “worsened considerably”.
The report showed that social landlords are forecasting continued surpluses.
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Landlords also forecasted significant investment in new and existing homes with plans to develop more than 30,000 new homes and invest £1.7bn in existing homes over the next five years.
They expect net assets to grow by an annual average of 5% over the five years, with modest but steady growth from 3.3% in 2022-23 to 6% in 2026-27.
This would take aggregate net assets to £5.4bn by 2026-27, with net housing assets up to £18.8bn over the same period.
They expect turnover to increase by 0.4% over the next five years, and rent arrears to peak at 4.7% in 2022-23 before returning to more historic levels of between 3% and 3.5%.
Shaun Keenan, assistant director of regulation at the SHR, said: “Registered social landlords (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.”
He said this will have impacted business plans and is likely to have led to social landlords “making significant changes” to their financial projections since they submitted the plans.
“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,” Mr Keenan said.
He added that the regulator will continue to work closely with landlords, tenants and all stakeholders “as we all work to tackle the financial challenges ahead”.
