The sector was this week shocked to learn of proposals to change Treasury accounting rules that could have major implications for the value of social housing stock.
Consultation paper The Green Book outlines proposals to change the formula applied by the Treasury to public finance schemes such as stock transfers and housing private finance initiative schemes – a worrying prospect for councils that have made detailed calculations about their stock options. The deadline for responses to the consultation is tomorrow and, as yet, none of the sector's principal representative bodies have responded.

The paper was published with little fanfare in July and the social housing sector has only just realised the potential implications.

John Perry, policy director at the Chartered Institute of Housing, admitted that the consultation had taken him by surprise.

He said: "We may well respond to the consultation paper, but it will be more important to talk to the Office of the Deputy Prime Minister to explore the implications."

The key change is lowering the discount rate used by the Treasury from 6% to 3.5% to reflect lower rates of interest in recent years.

A spokesman for the Office of Government Commerce said this will allow the government greater flexibility to decide the risk to attach to projects, making the system more transparent.

Housing finance expert Steve Wilcox, of York University, said: "If the Treasury goes through with this, the ODPM will have to redo valuations used for things like stock transfer and councils would have to redo their sums.

"I would guess that district transfers would have a lower discount, thus leading to higher receipts, so that large-scale voluntary transfer becomes more attractive."

He added that in urban areas, the discount rate could remain the same or even rise. "This could lead to a higher requirement for debt cover from the government," he warned.