Regulator underlines the need for RSLs to plan for Brexit
The Scottish Housing Regulator has written to all RSLs to underline the importance of compliance with Regulatory Standards in the context of uncertainty around Brexit.
The Regulator’s letter highlights Regulatory Standard 3 which requires each RSL to manage its resources to ensure financial well-being and to base financial forecasts on appropriate and reasonable assumptions.
Ian Brennan, director of regulation, said: “Late last year the Bank of England set out a range of scenarios to illustrate the possible impact upon key economic variables of withdrawal from the European Union. Some of these scenarios indicate the potential for key variables such as the rate of inflation and interest rates to show greater volatility than they have in the recent past.
“Each RSL, when monitoring and assessing its present and future compliance with Regulatory Standard 3, should take account of this potential for greater volatility in the assumptions that underpin financial forecasts, sensitivity analysis, scenario planning and business planning.
“Where an RSL identifies a serious risk to its stability or viability in the course of its business planning it should inform us in accordance with our guidance on Notifiable Events.”
Earlier this month, the Regulator for Social Housing in England warned social housing providers to prepare for the possibility of a no-deal Brexit.