Council tenants and leaseholders in the London Borough of Merton now have a clearer picture of how their housing needs could be met in the future.

At last week’s Cabinet meeting, members agreed on the way council homes would be managed if a transfer of the homes goes ahead.

It will involve setting up a new, local organisation that has the backing and expertise of an existing parent group – called a Registered Social Landlord or housing association.

A steering group that includes tenants and leaseholders recommended that this model would best meet Merton’s residents’ needs.

The transfer of the council’s homes, known as the Better Homes project, is being proposed by Merton Council because it will provide tenants with better quality homes and neighbourhoods and allow them to have more say in the way in which they are managed.

Currently, 60% of council houses in the borough do not meet the Decent Homes Standard, which is a benchmark set by the Government.

Sufficient improvements can’t be made because of the amount of rental income paid into the national housing pot. 35p of every £1 of rent collected is used to subsidise housing in other parts of the country.

It is estimated that providing Merton residents with modern, energy efficient homes would cost approximately £129 million over the next ten years. In the same period the council will only have £51 million available.

The benefits of a transfer to a housing association are that housing associations can keep all their rental income and do not contribute to the national housing pot. They can also borrow money for improvement works in ways in which the council can’t.

Head of Housing, Jo Williams, says: “The needs of our tenants and leaseholders are our priority and we want to ensure they have homes that not only meet minimum standards but are fully modernised. A transfer to a housing association offers our residents significant home and estate improvements and a secure future for the same rent they pay now.”

Merton Council can only transfer its homes to a new housing association if it demonstrates that the majority of tenants are not opposed to the transfer.

A ballot will be held in spring 2009.