A future Labour government would rip up the current definition of affordable housing and instead bring in a measure linked to people’s incomes, Jeremy Corbyn has said.

Launching a green paper of social housing yesterday, the party leader accused ministers of stretching the term affordable to breaking point to include homes let at up to 80% of market rents – more than £1,500 a month in some areas – and homes for sale up to £450,000.

“It has become a deliberately malleable phrase, used to cover up a shift in government policy towards increasingly expensive and insecure homes,” the report said.

Instead the 40-page green paper sets out plans to link affordability to people’s incomes on tenures including social rent, living rent and low-cost ownership.

One ‘common yardstick’ is whether rent or a mortgage costs more than one-third of a household’s after-tax income, Labour said.

‘Housing for the Many’ also sets out plans to build one million new homes – the majority for social rent – over 10 years.

In recognition of the issues raised by the Grenfell fire, Labour proposes a new standard for “decent” social housing – including fire safety guidelines for the first time – and ways of strengthening tenants’ voices. Local authorities will also be given key powers that many have been calling for, namely borrowing freedoms and increased central funding for new builds.

Jeremy Corbyn said: “When housing has become a site of speculation for a wealthy few, leaving the many unable to access a decent, secure home, something has gone seriously wrong. We need to restore the principle that a decent home is a right owed to all, not a privilege for the few. And the only way to deliver on that right for everyone, regardless of income, is through social housing.”

The paper includes a series of other measures, including creating a new Department of Housing and an independent watchdog, along the lines of the Office for Budget Responsibility, to assess the government’s policies and ensure they are delivered.

A Labour government would also end the right to buy, which the Cameron government extended to cover tenants in social housing, risking the depletion of the supply of social housing. Labour would also lift the cap on borrowing by local authorities, to allow councils to build more social housing themselves.