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Scottish social landlord borrowing reaches £6bn
The amount of borrowing undertaken by social landlords in Scotland reached its highest ever point this year, with £6bn being made available through loans and investment.
According to the Scottish Housing Regulator’s (SHR) annual report on registered social landlords’ loan portfolios, the amount of funding available to social landlords increased by 14% from £5.2bn in 2017/18.
The £0.8bn increase in funding between 2017/18 and 2018/19 was more than double that reported in any of the past 10 years.
Of the £6bn available to landlords this year, £5.1bn (85.4%) came from traditional borrowing through banks, while bonds and private placements accounted for £0.87bn (14.6%).
Investment from the capital markets increased 60% from £0.5bn in 2017/18 and has grown significantly from no investment from the capital markets four years ago.
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The Royal Bank of Scotland remained the sector’s biggest lender, providing more than £2bn in loans and accounting for 33% of money lent to social landlords.
A total of four investors provided funds to Scottish landlords in 2018/19, with the largest investor being Canada Life (£0.16bn). A further £330m was raised through own-named bonds (£0.33bn).
While the majority of new loans were taken out for the development of new affordable housing, 2018/19 also saw a significant increase in the refinancing of existing borrowing.
A total of £0.24bn in loans was for the purpose of refinancing, up 361% from £0.05bn in 2017/18.
Shaun Keenan, assistant director of regulation at the SHR, said: “Well-performing, financially healthy RSLs attract greater investment at more competitive rates to invest in the homes and services they provide.
“So, continued growth in lender confidence and a financially strong sector is good news for tenants and service users.
“We will continue to work with landlords to deliver effective regulation and to support them in building a culture of self-assurance in their own organisations to continue to build lender confidence and attract investment in homes and services for tenants and service users.”
