According to the CML, the government is wasting money on subsidising social renting.

Research carried out by the CML in Housing Finance, its quarterly journal, showed low-cost home-ownership schemes to be more cost-effective than subsidising social renting.

The main low-cost home-ownership schemes are shared-ownership schemes, which function on a part-buy/part-rent basis and Homebuy. Homebuy provides an interest-free loan for buyers to use as a top up to a conventional mortgage, reducing the overall cost of servicing the total debt.

Peter Williams, deputy dir-ector general of the CML, said: ‘Value for money is key and low-cost home-ownership looks like a useful mechanism for the Government to exploit further.’

But a spokesman for ARLA questioned whether locking people into such long-term deals was appropriate.

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He proposed a change to the benefit system that would allow the bottom end of the rent market to more easily move into the mainstream and suggested a move away from benefits being paid in arrears.