Low levels of grant funding, by historical standards, have led housing associations to develop a cross-subsidy model in recent years. The number of homes built for market sale by housing associations grew 24% between 2016/17 and 2017/18. Housing associations are increasingly reliant on proceeds from market development to fund affordable housing through the crosssubsidy model. They have never been more exposed to a cyclical slowdown in the housing market. Particularly in London and the South, the cross-subsidy model has benefitted from strong house price growth, boosting the level of cross-subsidy generated. But the housing market is slowing down: price growth is decelerating and transaction volumes are falling, albeit that many new home sales are supported by Help to Buy. This makes selling new homes on the open market more challenging. Housing association activity is likely to become constrained by a tightening housing market as the generation of cross-subsidy will slow. This cyclical slowdown in house prices is concentrated in London and the South, the areas with the greatest need for affordable housing. The slowdown in new homes sales rates has created opportunities for housing associations to acquire market sale homes from housebuilders to switch into shared ownership