Two-thirds of councils expect to scale back plans for new housing

Collectively, the 76 local authorities surveyed manage around 870,000 homes across the country.

The government is currently consulting on changes to the Right to Buy to address the problem of dwindling social housing stock. The plans include reducing the discount available to tenants who want to buy their home.

However, Kieron Williams, the leader of Southwark Council, said: “Without significant further action, councils will be unable to build at scale and unable to bring existing homes up to green and decent standards fit for the future.”

The survey is a follow-up to a report published by Southwark Council last September, which called for a “new, sustainable” Housing Revenue Account financial model. This should include a long-term rent settlement and a return to rent convergence, the report said.

Gavin Smart, chief executive of the Chartered Institute of Housing, said he was concerned by the results of the survey, which showed the “severe financial strain on councils’ housing budgets”.

He added: “The current system is not sustainable, and it is crucial the government acts now to protect the future of council housing, which provides a foundation for so many people.”

A Ministry of Housing, Communities and Local Government spokesperson said: “This government will deliver 1.5 million homes as part of our Plan for Change, including the biggest social housing boost in a generation, and we will work with councils to achieve this.

“We know that local government has suffered from years of short-term decisions, which is why we have already set out important steps to help them deliver the homes we need.

“That includes overdue reforms to the Right to Buy scheme and an extra £500m for the Affordable Homes Programme, and we will soon set out further measures.”