Tenants in Kingston-Upon-Thames have rejected transfer for the second time in 12 years.
Almost two-thirds of those who voted in the latest ballot organised by the Surrey council opposed the transfer of 6000 homes. The turnout was roughly 65%.

The result, released on Tuesday, indicated that opposition has grown since the last ballot on transfer proposals in 1992. Then, only 52% of voters said no.

Kingston council now faces a £40m funding gap if it is to meet the decent homes target by 2010 – 40% of its homes do not meet the standard at present.

Mike England, head of housing at Kingston, said: "We were depending on transfer to meet the decent homes standard. As we stand today, we don't have the resources to get there. Right now, we have no idea how we can take it forward."

We were depending on transfer to meet the decent homes target

Mike England, Kingston council

He said there had not been a large campaign by anti-transfer groups but added: "It was a very clear decision by the tenants and we have to respect it."

England said he would be seeking meetings with councils such as Birmingham and nearby Merton, which had also had "no" votes, to try to find a solution.