Interest rates at 15-year high, RSL borrowing falls: UK regulator.

A Decrease in RSL Borrowing Amidst Rising Interest Rates

A recent report from the Scottish Housing Regulator has shed light on a decline in the number of Registered Social Landlords (RSLs) taking on new loans and the total value of these loans in the period of 2023/24 compared to the previous year. Despite this decrease, the overall liquidity in the sector remains strong, according to the findings revealed in a new report released by the Scottish Housing Regulator.

The report represents the regulator’s annual analysis of RSL loan portfolio returns spanning from April 2023 to March 2024. It highlights that 19 RSLs secured new finance during 2023/24, amounting to £198 million. This brings the total agreed borrowing facilities in Scottish RSLs to £6.84 billion, with RSLs also aiming to increase their borrowing by £1.5 billion over the next five years.

Shaun Keenan, the assistant director of financial regulation, remarked, “RSLs as a whole have maintained adequate liquidity to navigate the impact of rising interest payments and operational expenses, despite interest rates hitting a 15-year high.”

Keenan further noted, “Even in the face of a significant surge in debt costs and the ongoing dynamics in financial markets, RSLs have articulated plans to borrow an additional £1.5 billion in the coming five years. It is therefore imperative for RSLs to ensure access to the right expertise and resources to secure financial products that best suit their operations. Additionally, maintaining the trust of current and potential lenders and investors is paramount.”

He added, “In scenarios where RSLs display signs of low liquidity, we will actively engage with them to address the situation.”

To access the regulator’s complete report on the annual analysis of RSL loan portfolio returns for 2024, visit their website at www.housingregulator.gov.scot.