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.