The Government's plan to sell state houses to private providers has hit a hurdle after a major buyer pulled out of the process.
Ministers confirmed today that the PACT group had withdrawn from the process to buy and manage 348 state houses in Invercargill.
Finance Minister Bill English said the organisation had "decided the transaction wasn't the best opportunity for them to achieve their aspiration of providing services to the community".
PACT was the only party invited to submit a proposal to buy to Invercargill properties.
As a result, the Government was now putting the procurement process on hold, Mr English said.