Latest figures from the LGA, which represents 349 English local authorities, show 12,246 council homes were sold to tenants under RTB in England in 2015/16 but just 2,055 replacements were started by councils – a drop of 27 per cent on the year before.

The LGA forecasts that 66,000 council homes will be sold to tenants under the existing RTB scheme by 2020. The organisation fears councils will struggle to replace the majority of these homes because of restrictions imposed on them that it says hamper their ability to build replacement homes.

Councils only keep a third of all receipts from RTB homes that are sold, while further “complex rules and restrictions” mean councils are struggling to rapidly replace them, the LGA said.

The organisation said the scheme needs urgent reform to ensure councils are able to replace housing sold quickly and effectively. Furthermore, councils need to be able to retain 100% of receipts from any council homes they sell and RTB discounts should be set locally to reflect local house prices.

Local government leaders warn this drop in the number of “much-needed” council homes will exacerbate the housing crisis, increase homelessness and housing benefit spending – at a time when there are 1.4 million people on council housing waiting lists.

“Current RTB arrangements are restricting councils from being able to replace homes being sold under the scheme. RTB will quickly become a thing of the past in England if councils continue to be prevented from building new homes,” said Councillor Nick Forbes, the LGA’s senior vice chair.

“Housing reforms that reduce rents and force councils to sell homes will make building new properties and replacing those sold even more difficult. Such a loss in social housing risks pushing more people into the more expensive private rented sector, increasing homelessness and housing benefit spending.

“Scotland has scrapped RTB, and Wales is looking at doing the same. Councils in England believe this policy can be made to work if they are able to build the replacements that protect essential local housing, and ensure future generations can also benefit from the scheme.

“If we are to stand a real chance of solving our housing crisis, councils need the funding and powers to replace any homes sold under RTB quickly and reinvest in building more of the genuine affordable homes our communities desperately need.”