Eleven local authorities in Wales which have retained their social housing stock, will exit the UK Government’s Housing Revenue Account Subsidy (HRAS) system and become self-financing.
Councils will be given more powers over their housing stock which will enable them to keep all the rental income they receive from tenants and build new homes.
Councils will have control over their housing assets which are forecast to generate around £18 billion of rental income over the next 30 years.
Communities and Tackling Poverty Minister, Lesley Griffiths, said: “Many hours of complex negotiations and a great deal of hard work has gone into securing this agreement, which will have a very positive impact on Wales’ council housing stock.
“Each council will be better off every year and will enjoy new freedoms which will provide them with the incentive, flexibility and control to invest further in their housing stock.
“The increase in councils’ housing revenue as a result of this deal will allow them to improve their existing properties and build new council houses.
“Today’s historic deal will, therefore, also have a direct impact on tenants who will benefit from living in more comfortable, higher quality homes.”