Wales' fledgeling stock transfer process was dealt a blow last Friday when Wrexham council tenants rejected transfer to a registered social landlord.
On a turnout of 69%, 58% of tenants voted against the move, which would have been the second full stock transfer in Wales.

This means the council will have to raise rents or close housing offices in order to raise the £274m needed to bring its 12,700 homes up to the Welsh housing quality standard.

Council leader Shan Wilkinson said: "We need to talk to our tenants to find out which of the services we provide they are prepared to give up or if they are prepared to see rents rise.

"We have very difficult challenges ahead but despite that, our tenants have put their faith in us and we will continue to provide the best service we can with the limited resources available to us."

Arm's-length management organisations are not an option for Welsh councils and, as in England, take-up of the private finance initiative has been small.

The Wrexham vote may make Welsh councillors cautious about announcing transfer plans before this June's local elections.

Only a handful of Welsh councils will be able to meet the housing quality standard by the 2012 deadline without extra resources from stock transfer or prudential borrowing.

Keith Edwards, director of the Chartered Institute of Housing Cymru, said: "It may make one or two organisations a bit more cautious. We need to learn the lessons from Wrexham.

The town had seen a fierce anti-transfer campaign backed by local Welsh Assembly member John Marek. He has asked representatives from the assembly to meet the council to find other ways of funding improvements.

However, Wilkinson said the assembly had told the council "in no uncertain terms" that there was very little money to help Wrexham.

A new group, Wales Against Stock Transfer, was launched as Wrexham's result was announced. The group will begin by targeting Swansea council, which is set to consult tenants on stock transfer.