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Under the proposals announced by Housing Minister Margaret Beckett, councils would be able to keep all the rental income from any homes they build, as well as keep the receipts from any of those homes which are later sold through Right to Buy.
The extra money could free councils to invest in the building of more council houses, helping to deliver more homes for families in need.
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Councils currently only build a few hundred council homes a year, with the majority of new social homes being built by registered social landlords. The consultation proposals would seek to boost this build rate by removing some of the financial barriers stopping councils from building new properties and increasing their housing stock.
Housing Minister Margaret Beckett said she wanted local authorities to play a bigger role in the delivery of council housing and invited councils interested in building more homes to discuss their ideas with the Homes and Communities Agency.
Ms Beckett said: "We are determined to help keep house building going in the current climate, as the long term need for more homes is not going to disappear. These new freedoms will encourage councils to play a bigger role in driving forward the delivery of new affordable homes for families in housing need."
(CD/JM)
