Housing associations are well placed to help tackle long-term shortages in affordable housing, according to the latest figures from the Tenant Services Authority (TSA).

In its quarterly survey of housing associations and their financial positions, the TSA found that while not immune to the current economic downturn, the housing association sector overall is demonstrating resilience and can help meet the unprecedented demand for affordable homes for rent.

Chief Executive Peter Marsh said with the ongoing problems in international credit markets and the continued slowdown in the UK residential property market, housing associations were facing the most challenging times known to the sector.

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Some associations were reducing their costs and exploring mergers and other partnerships to help them cope with these challenges, he said.

Mr Marsh said: "Demand for affordable homes remains high - a fact recognised by the Government's £8.4 billion three-year investment programme.

"Building homes through housing associations remains one of the strongest - if not the strongest - public private partnerships in the UK construction market.

"Unlike private developers who only build homes for sale, the core business of housing associations is building homes for rent.

"I welcome the steps taken so far by the Homes and Communities Agency to provide additional funding to housing associations. We have seen in some cases grant rates from the HCA for social rented homes increasing to reflect the reduction of shared-ownership profits.

"We are working closely with the HCA to ensure that extra funding for housing associations is targeted to help the 4.5 million people most in need."

(CD/JM)