The right-to-buy has become “unsustainable” and councils must be given more powers to replace lost housing and set discounts locally, the Local Government Association has warned.
LGA analysis shows that nearly £3.5bn in right-to-buy discounts had been given to council tenants in the past six years.
It also showed the average discount had increased by 132% in 2016-17 since the right-to-buy was revitalised six years ago.
Judith Blake (Lab), LGA housing spokesman and leader of Leeds City Council, said: “Selling council homes at a discount of nearly half price has led to a social housing fire sale that threatens the future of the scheme.
“The rate of homes sold under the right-to-buy combined with the restrictions on councils is making replacing homes sold virtually impossible.”
LGA analysis found a total of nearly 58,000 council homes have been sold under right-to-buy in the past six years.
Councils reported a 409% increase in right-to-buy sales between 2011-12 and 2016-17, rising from 2,638 to 13,416 homes sold per year. Right-to-buy sales also doubled in the two years after the new discount was introduced, with 5,944 local authority homes sold under the program in 2012-13, compared with 12,304 homes in 2014-15.
The right-to-buy scheme was introduced by the Housing Act 1980, allowing council tenants in England the right to buy their home at a discount. More than1.8 million properties have been sold to tenants since the law was introduced.
The government allowed the size of these discounts to increase in April 2012 - meaning that many properties were sold at half price.
The LGA is also lobbying the government to “completely scrap the cap” on the amount councils can borrow to invest in new and existing homes.
Cllr Blake said: “For the right-to-buy to work, councils must be able to replace every home sold. Councils must be allowed to set right-to-buy discounts locally, retain right-to-buy sale receipts in full to replace sold homes, and be given the freedom to borrow to build new affordable homes.”
This comes after the Treasury select committee said the cap should be lifted so councils can be “unleashed” and help build the homes the country needs.