Leading housing associations should be made exempt from government rent reduction policies to free them up to build more homes, according to a new report by the Policy Exchange think tank.

The report calls for individual deals between the government and housing associations and has been welcomed by the Social Housing team at Clarke Willmott LLP.

The team’s head of development Chimi Shakohoxha said: “Greater cooperation between government and the housing associations could boost new housing programmes.

“The report from the Policy Exchange calls for the top performing housing associations to be exempt from government moves to reduce rents 1% per year for the next four years.

“This exemption would ensure housing associations exempted from the policy could borrow more in order to deliver more new homes.”

The proposed measures support consolidation in the sector as efforts to create more capacity and generate efficiencies continue – despite a number of high profile ‘mega-mergers’ having proved unsuccessful.

The report also called for a ‘Right to Part Buy’ product to be offered to housing association tenants eligible for the Right to Buy scheme, in order to encourage higher levels of homeownership.

Shakohoxha said: “Currently, the rate of housebuilding is well below the government’s desired target of one million new homes by 2020. However, the new incentive to encourage housing associations to build more should bring them closer to that target.

“Any measure that can help increase the bandwidth of homes built is welcome. Offering tenants the opportunity to part buy through the ‘Right to part Buy’ or ‘Portable Right to Buy’ for a new build home instead, is also welcome as a way to support an expanded offer of homeownership.

“We work with the sector very closely and can see that this is a beneficial opportunity for the sector and the government. We hope the government will listen.”