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But like other housing associations, we cannot escape the credit crunch, and finding new funding will be difficult but not impossible.

However, the credit crunch is not the only threat. The review of Department for Work and Pensions housing benefit rules for temporary accommodation isn’t helping. We are confident our model is robust enough to remain viable, but the uncertainty about benefit is making local authorities anxious about signing-up to long-term deals.

The Newham initiative began with the council leasing 450 homes valued at £50 million to the association for a 125-year period. The Royal Bank of Canada made the association a loan facility of £200 million against the value of the leases. Local Space used the finance to purchase homes on the open market, which were then handed back to Newham to house homeless families.

The loan is serviced by the association’s rental income, which is paid by housing benefit. The Housing Corporation also contributed £25 million of grant to purchase the first 1,000 homes. The loans will be repaid after 15 years at which point the housing used for temporary accommodation will become permanent homes. The model can be tailored to meet the needs of other authorities and does not depend on the use of equity stock.

Our success has encouraged the government to launch its settled homes programme – and we are in discussion with several London boroughs about extending the initiative while addressing the issues of high rents and worklessness. We are also in discussion with boroughs about using section 106 funding to buy larger properties to meet the demand for family homes.

Outside the capital, we have been talking to local authorities in market renewal areas. Our expertise in buying older homes, bringing them up to a decent homes plus standard and adding them to the social housing stock could support gradual renewal programmes.

Another partnership initiative is being developed with a number of coastal towns, which have large private rented sectors – in some cases twice the national average of 10 per cent. Many of the homes in these resorts are in poor condition and badly managed.

In several coastal towns the increase in the number of houses in multiple occupation (HMOs) is adding to the problems of poverty and social exclusion and fuelling the flight of better-off owner-occupiers. Our track record of dealing with HMOs could be of great use to these communities.

The government has launched modest initiatives to ease the current housing problems, making £200 million available to housing associations to buy about 1,000 homes off the peg.

We believe the money should be spent on family homes, and not used as a rescue package for builders wanting to off-load one-bed flats and studio flats they can’t sell.

Ashley Horsey is commercial director of Local Space Housing Association.