Stock transfers from councils to private sector landlords are likely to be replaced by the PFI as the government's preferred method of managing and refurbishing social housing projects.
Jeff Zitron is a director of public sector consultant HACAS, a research fellow at Henley Management College and a specialist in stock transfer. He is undertaking a study of the transfers, and one of his interim results is that the government is likely give them a secondary role in future.

He said: "Government thinking on the PFI is positive because of difficulties with stock transfers – there is a strong possibility that government will have to shift towards the PFI."

Both stock transfers and PFI housing have been plagued with problems. Earlier this year, council tenants in Birmingham voted against the handover of 85,000 homes to registered social landlords. And no PFI housing scheme has been agreed so far, even though pilot schemes were launched nearly four years ago.

Zitron said: "In some ways, the PFI is less controversial because it allows councils to retain the freehold of the assets. PFI is especially beneficial where it is linked to regeneration projects."

The government is now looking at ways of speeding up PFI schemes, and has appointed PPP adviser Partnerships UK to help out.

The PFI is less controversial than stock transfer because councils retain the freehold of the assets

Jeff Zitron, stock transfer specialist

The second wave of PFI housing projects is expected to reach financial close more quickly than the first schemes.

A source close to deputy prime minister John Prescott confirmed that stock transfers were losing favour. "Post-Birmingham, the government is looking again at other ideas, including arm's length management organisations."

The ALMO system – the third key option for social housing management – involves the establishment of a not-for-profit organisation that is independently responsible for managing stock. Ownership of the housing is retained by the council.