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The government is proposing to introduce legislation at Westminster to head off a crisis in Northern Ireland housing associations.

It concerns the way in which their borrowings are classified.

In 2016, the Office for National Statistics (ONS) reclassified housing associations from the private to the public sector.

This was primarily a technical change concerning how their spending was recorded in the UK national accounts.

However, it also has major practical consequences for how housing associations can operate.

It would make it difficult, if not impossible, for housing associations to draw down borrowings from banks and other sources.

For example the sector would no longer be able to use a form of government borrowing known as Financial Transaction Capital (FTC).

That is because public bodies are not eligible to receive FTC loans.

Social housing leaders said it would drastically reduce the sector's ability to build new houses.

Ministers at Westminster and the other devolved administrations have introduced legislation that allows housing associations to remain private organisations.

However, Northern Ireland is without a devolved administration and has been relying on relevant legislation being passed at Westminster.

Now, a government spokesperson has confirmed that the NI Civil Service (NICS) is working with the ONS to draft legislation.

"The UK Government is considering when this legislation could be introduced in Parliament on behalf of NICS," said the spokesperson.