All 221,000 homes were meant to meet the Welsh Housing Quality Standard by the end of this year but this goal will not now be met for ‘some considerable time’, according to the audit report.

The standard sets seven quality targets for homes, including that they are structurally stable, fuel efficient and well insulated.

In 2010, 26% of social housing had fully met the standard, according to government figures published in March 2011. A much higher proportion complied with parts of the standard, with the greatest shortfall being in bathrooms and kitchens.

According to landlords’ projections, 61% of homes will meet the standard by March 2013. About half of the remainder will achieve the target by March 2017. The remaining 21% of the homes will fail even by this date because they are in the middle of stock transfer votes or tenants have voted against transfer.

Auditor general Huw Vaughan Thomas said that although the quality of many homes had improved since the standard was introduced in 2002, there had been a ‘weakness in leadership’ of the plans.

In particular, the Welsh Government had not acted swiftly enough to support and supervise progress or to monitor the value for money of the significant investment in work to achieve the standard. It is also ‘unclear’ how much the government had spent on the scheme.

The report, Progress in delivering the Welsh Housing Quality Standard, also found that the ten-year target had been hit by slower than expected development of landlords’ work plans.

Landlords plan to have spent £2.5bn on major repairs and planned maintenance between April 2011 and March 2017 to achieve and maintain compliance.

The report makes a number of recommendations for government based on this new finish date, including strengthening monitoring arrangements and identifying solutions for homes that won’t meet the standard by then.

Vaughan Thomas said: ‘The quality of social housing is clearly improving, but a lot of work remains to be done to ensure all social housing in Wales meets the minimum requirements of the Welsh Housing Quality Standard.

‘The Welsh Government needs to demonstrate effective leadership to ensure that progress is sustained and the substantial investment planned for the next few years is used to best effect, particularly in these challenging financial times.’

A Welsh Government spokeswoman said it was actively working with landlords that have indicated they will fail the 2012 target date.

She added: ‘Around £1.6bn has been invested to date in bringing people's homes up to the standard and, in these challenging economic times, we are committed to continuing to invest in improving the housing stock. Despite significant cuts to capital budgets as a result of the UK government settlement, the WHQS budget has been protected for the next two years.’