Social Landlords in Scotland: Shaping up for improvement

Social Landlords in Scotland: Shaping up for improvement.changed and has the potential to change again in ways that will affect theviability and future prospects of the sector.9.4 We have found that while some landlords have a firm, fact-based grasp of theprofile of the people they are housing and understand the way this may bechanging over time, many do not. This is poor given the importance of astrong customer focus to a landlord’s business and future. It is possible therewill be more younger single adult households (some with children) and fewermiddle aged people (particularly families) in the sector. And older people mayform a larger proportion of all tenants, highlighting the need for housing policyand practice to connect with health and care requirements. It is likely thatfuture tenants will have different needs, aspirations and expectations in termsof the services they pay for, the sort of behaviour they are willing to toleratefrom other households, their appetite to participate, and the homes andneighbourhoods they live in. Overall, landlords need to know more about thelikely changing needs of their existing tenant base if those tenants remainwith them and how other changes to their future tenant base might affect theirplans and investment decisions. And this needs to be set within a broaderdiscussion about what sort of customers the sector is seeking to serve in thelonger term and what role the sector has in the broader housing system.9.5 Financial sustainability is fundamental to the ability of the organisations withinthe sector to deliver for their customers and other stakeholders. As hasalready been highlighted, operating costs have risen markedly as a proportionof turnover in the last ten years and, in the RSL sector, this has been partlymitigated by the effects of relatively cheap borrowing. The RSL sector maycontinue to enjoy the benefits of cheap finance relative to other sectors of theeconomy if our regulation framework remains fit-for-purpose in a harshereconomic climate. But, in any event, borrowing costs are likely to be higher inthe future than they have been in the past; the supply of debt is likely to fall asfewer lenders are willing to operate in the sector and lenders’ costs rise astheir regulatory environment tightens. Both RSLs and local authorities willneed to act decisively and make difficult choices in reviewing their financialhealth.9.6 One of the key challenges for the future will be cost control and reduction –for example, through working collaboratively with others, sharing services,negotiating better deals with suppliers, reviewing staffing structures and53