Policy Exchange has called for the Government to sell expensive social properties in order to build a greater number of cheaper properties.
The think tank estimates the sale of 28,500 properties worth more than the local average house price could raise close to £6bn and the construction of cheaper properties could create between 160,000 and 340,000 jobs.
Policy Exchange says “expensive” properties should be defined by a regional median, which is capped at four bedrooms. Estimates place 836,000, or 21.8 per cent, of social properties above the relative median. London has the highest proportion, with 30.7 per cent of stock, while the North East has the lowest with 14.8 per cent.
The think tank estimates the total value of stock classed as expensive is £159bn, with an average turnover rate of between 6 and 7 per cent a year.
It says the sale of 3.5 per cent of the expensive social housing stock would sell off 28,500 expensive properties yearly and raise £5.5bn for new housing construction. An additional 80,000 homes could be built, representing a net gain of 50,000 social homes annually.
Construction of new housing fell 4 per cent in 2011 to 98,000, close to a record low.