HOUSING associations have hit out at recommendations that expensive social housing should be sold off.

The suggestion to sell off expensive social housing when it becomes vacant was made by the think tank Policy Exchange.

Doing so would generate £4.5bn a year, it said in a report called Ending Expensive Social Tenancies: Fairness, higher growth and more homes.

Money raised could be used to build 80,000-170,000 new social homes a year in other areas, reducing the housing waiting list by up to 600,000 households in five years, the think tank claimed.

But the National Housing Federation, which represents England's housing associations, described the idea as "fundamentally flawed".

Working people who couldn't afford to buy their own home homes or rent privately would be priced out of many areas, it warned.

The Policy Exchange report says expensive social housing – almost one third of it in London – accounts for over a fifth (21.8%) of the UK's total social housing stock.

Selling it off and using the money to build homes in cheaper areas would create growth and jobs, the report argues.

Report author Alex Morton said: "Expensive social housing is costly, unpopular and unfair. That is why almost everybody rejects it.

"Social housing tenants deserve a roof over their heads, but not one better than most people can afford, particularly as expensive social housing means less social housing and so longer waiting lists for most people in need."

National Housing Federation chief executive David Orr said the report rightly recognised the need for a building programme to overcome a huge shortage of homes.

But he added: "The idea of selling off social housing in 'high value' areas to build more in cheaper areas is fundamentally flawed.

"It could effectively cleanse many towns of hard working people who simply can't afford the high prices of buying or renting privately.

"The report also ignores the fact that there is not the mortgage availability or market for people to buy these homes."

Mr Orr said he absolutely agreed that housing associations needed more flexibility over how they best use their properties. But they should not be forced to sell off their assets.

"The answer is building more homes and the flexibility to take an imaginative approach.

"This might sometimes mean selling some of their higher cost properties, or it might involve taking advantage of the value of those properties to innovatively raise finance."