The move came when the town hall realised plans to reduce the number of homes, and rent restructuring, would leave a shortfall of at least £10m.
High rents and the length of time needed to refurbish some of the homes are understood to have been an issue.
Manchester housing executive member Basil Curley said he regretted the transfer could not proceed after such long preparation.
"The new rules to restructure rents for local authority and RSL homes have had a significant influence," he said. "The business plan we developed was based on retaining a smaller number of homes for rent than at present, with the aim of creating a sustainable estate.
"But taking the most optimistic view of the potential for funding from outside agencies, a funding gap of £10m was forecast."
Harvest chief executive Ian Perry said all agencies had worked hard to find a solution and everything possible had been done within existing policy and funding frameworks.
"The scale of change needed on an estate like Hattersley coupled with the impact of rent restructuring makes this impossible," he said.
The Hattersley decision will streng-then concerns that the era of easy urban estate transfers is coming to an end. Funding problems and low demand could mean the government will have to find more money if the programme is to keep its momentum, experts warn.
"This illustrates the increasing difficulty of using transfer or other methods to improve stock in low demand areas," said National Housing Federation policy director Liz Potter.
"We call on the spending review to consider our proposals to address these issues."
Curley promised Hattersley and Mottram tenants that Manchester was still committed to working towards a sustainable future for the estates.
Source
Housing Today
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