The Government's flagship policy to let housing association tenants buy their homes at a reduction of up to £100,000 under the Right to Buy scheme has been branded "chaotic" after ministers gave ground on the plan.
Extending Margaret Thatcher's 1980s policy on tenants buying discounted council homes to 1.2m housing association properties was a flagship Tory manifesto promise, but caused unease against fears promises to replace a sold home could not be delivered.
At a housing conference today Communities Secretary Greg Clark indicated he would "consider" a new deal proposed by the National Housing Federation, which gives the housing bodies more freedom over their stock.
In it, housing associations would be fully compensated for every home sold to tenants - but they would also have the "discretion not to sell" where a property could not be easily replaced, such as in rural areas.
Tenants would, nonetheless, get a "portable discount" to buy an alternative property.
In return, the Government would get the support it needs from the industry and avoid having to legislate, which would have prompted an embarrassing row in Parliament.
Legislation would have changed the status of housing associations, threatening their independence, and added £60 billion worth of debt to the public balance sheet.
But while the phrase "voluntary" was floated, the Government indicated housing associations would have to jump before being pushed.
"If they fail to (comply with our Right to Buy policy), we will bring forward measures forcing them to offer it to tenants,” a Government spokesman said.
The Department for Communities and Local Government would only publish extracts of Mr Clark's speech, which hailed
there being "no reason why signing a tenancy agreement with a housing association should mean signing away your aspirations to be a homeowner".
He added National Housing Federation CEO David Orr's proposal included Right to Buy being "embraced by the sector" and that "every home sold would trigger a new home being built by a housing association, on a one for one basis".
A DCLG spokesman said: “We want to help anyone who works hard and aspires to own their own home turn their dream into a reality.
“The NHF have voluntarily come forward with a proposal, which the Government will now consider.
“Since 2012, councils have already delivered more than 3,000 homes through the reinvigorated Right to Buy scheme.”
John Healey, Labour's Shadow Minister for Housing and Planning, said: “Labour has said from the start this political pledge was unworkable and wrong. It is now looking increasingly chaotic.
“This is a clear sign of a Government running into trouble with their flagship election policy. It looks like Ministers are trying to strike a backroom deal with housing association landlords to deliver a policy which they fear they can’t deliver themselves."