Westminster City Council has confirmed it will take back control of the arms-length organisation it set up in 2002 to manage its housing.
The decision follows concerns about CityWest Homes' performance raised by residents and councillors.
CityWest provides homes for more than 12,000 social housing tenants and 9,000 leaseholders on behalf of Westminster City Council.
The council's report following a review said there was a need for a 'culture change' and reform of the organisation's management board so that residents are at the heart of the service.
Cllr Andrew Smith, cabinet member for housing and customer service, said: 'I believe there is no option now other than to bring the management of council housing under the council’s direct control.
'We believe that this will be the most effective way of driving through the improvements that our residents need to see.'
'Working closely with resident groups and associations, we will now take the necessary steps to restore confidence.
'Whether renting or leasing a council property, we’re determined to make sure our residents get the service they expect so that they have a safe and secure place they call their home.'