The capacity of the housing association sector to build new homes has dropped by around a third in just over a year due to the increasing cost of borrowing, according to a new analysis by insurance giant L&G.

L&G, which owns a for profit registered provider, L&G Affordable Homes, said the theoretical capacity of the traditional non-profit housing association sector to build had dropped from around 65,000 identified in a report it produced in March last year, to around 45,000 now.

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