Chelmsford Borough Council's entire housing stock of 7,300 homes could be transferred to a new, not-for-profit social landlord in a deal believed to be worth about £89 million.

The council said that the move was being put forward as it could not, as an authority, raise £40 million needed to bring its stock up to 21st century standards while keeping rents at reasonable levels.

Councillors will next week consider a report from consultants which concludes that the council would have to put rents up by 164 per cent to carry out the repairs needed at the same rate as a new registered social landlord.

And the capital receipt from the transfer would allow the council to fund about 500 new affordable homes for rent, easing the waiting list.

The new landlord could be a borough council-owned, arms-length, company -- and this is believed to be the favoured option of leading councillors -- or an existing organisation.

Among the advantages of such a transfer, the council lists a guarantee on rent increases being limited to one per cent above inflation for five years, and a greater role for tenants in the running of the housing service through voting membership of the management board of the new landlord.

The housing committee is being recommended on Wednesday to set up a steering committee of councillors and tenants to examine the way forward in detail.

Ultimately, tenants could be balloted.

Chairman Councillor Margaret Hutchon said: "When all the issues have been fully examined, conclusions can be reached, and whether there is a proposal sufficiently attractive to justify consulting all of the council's 7,300 tenants in detail. No changes will be made without the widespread support of tenants."

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