More than 190,000 council houses could be lost by 2020 if the government’s housing bill, currently passing through parliament, is approved, Labour has warned.

A proposal to force councils to sell their highest value homes, as well as the impact of increased discounts for council tenants granted the “right to buy”, will result in the loss of one in every eight council properties, according to the shadow housing minister.

Speaking in advance of the Commons housing debate on Tuesday, John Healey said the homes could be snapped up by overseas investors and buy-to-let landlords rather than people in housing need. The legislation being proposed by the communities secretary, Greg Clark MP, is an “extreme housing bill that fails young people and families on ordinary incomes who need a hand to afford a home to own or rent”, Healey said.

“Rather than running down the number of much needed affordable homes, ministers should be investing more homes to rent and buy,” said Healey, who was housing minister in Gordon Brown’s government.

The government has pitched its housing reforms as a major boost for the construction of homes to buy rather than rent, arguing that is what the majority of the population wants. Its initiatives include 13,000 directly commissioned new homes and a £1.2bn grant to help private housebuilders clean up brownfield land and build 60,000 new homes for sale, half for buyers under 40.

On Monday, David Cameron announced a £140m redevelopment programme for Britain’s sink estates, which he described as “concrete slabs dropped from on high, brutal high-rise towers and dark alleyways that are a gift to criminals and drug dealers”.

The scheme will include demolition of some estates and he said tenants and homeowners will be given binding guarantees that their right to a home is protected.

He said: “The mission here is nothing short of social turnaround, and with massive estate regeneration, tenants protected, and land unlocked for new housing all over Britain, I believe we can tear down anything that stands in our way.”

The policy is partly based on analysis by Savills, the property consultancy, which found that more and better homes can be created if 1960s-style estates are demolished and replaced by new housing with conventional layouts.

But Labour believes that the government’s parallel demand, that town halls sell off their most valuable council homes to fund the extension of the right-to-buy scheme to tenants of housing association properties, will combine with the existing decline in council housing numbers to see around 40,000 council homes disappear annually. There were 1.8m council homes in 2009 but that will drop to 1.4m by 2020 according to estimates by Labour with the House of Commons library.

“We simply can’t solve the housing crisis without more new homes of all types – including council homes,” said Healey. “By selling off affordable homes for local people to overseas speculators and buy-to-let landlords, ministers will make the housing pressures people face even worse. Rather than running down the number of much-needed affordable homes, ministers should be investing in more homes to rent and buy.”

The Department for Communities and Local Government, which is overseeing the sell-off of council housing to fund its extension of the right-to-buy initiative, defended the policy.

A spokesperson said: “The 2008 economic crash devastated the housebuilding industry, leading to the lowest levels of ‘starts’ for any peacetime year since the 1920s. We have got Britain building again, with more council housing being delivered since 2010 than in the previous 13 years. However, there are billions of pounds locked up in high value stock, which will be reinvested in building of new homes that better meet local needs as well as supporting home ownership through Right to Buy.”

In September Healey said Labour was considering a mass public housebuilding programme on a scale not seen since the mid-1970s. He said the state could build 100,000 new council houses and housing association homes a year to drive down the UK’s spiralling housing benefit bill and tackle the affordability crisis.

It would involve almost quadrupling the current number of affordable homes being built.



