Tenants on high salaries would in future pay a fair level of rent for the privilege of living in a social home, under plans announced by Housing Minister Grant Shapps.

The Minister argued that this "handout to the very rich" must end if social housing is to offer the vital support system to those in need. On average the economic subsidy provided by this to high earning social tenants in England is worth as much as £3,600 a year - a subsidy Mr Shapps said he considers unfair both to taxpayers and those who have been left languishing on social housing waiting lists.

The proposals published for consultation today would see high-income tenants - for example those earning above £60,000 or £100,000 - potentially paying up to market rents if they want to continue living in taxpayer-subsidised housing.

The move could see tens of thousands of high earning social tenants paying market rents to continue living in their social homes.

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Mr Shapps said that with millions of people languishing on waiting lists, it was right that those who could afford it 'pay to stay' in homes that should be helping those in the greatest housing need.

Today's proposals would give social landlords the extra flexibility they need to increase rents for high-income households - and seeks views on whether this is something landlords should be required to do. The additional income generated could then be used by landlords to increase spending on affordable housing.

Ministers believe the changes are necessary to address the problem of precious social housing resources being occupied by tenants who could comfortably afford to live elsewhere.

Housing Minister Grant Shapps said: "For far too long, millions of people on waiting lists have watched helplessly as high-earning social tenants continue to occupy homes designed to help the most vulnerable. These high-income tenants are not only blocking homes that could benefit those in greater housing need, they're also relying on poorer taxpayers to subsidise their lifestyle.

"A lazy consensus about the use of social housing has left landlords powerless to deal with this problem. So we want to call time on this blatant unfairness and these handouts to the very rich. Proposals I've announced today will give landlords the option to charge high-earning social tenants a fair level of rent - so if they want to continue using this precious national resource, they will pay for the privilege."

(CD)