Local authorities should be able to build on land that they own and to reinvest the money raised through the sale of council houses in new homes according to a report today from the House of Commons Communities and Local Government Committee. The committee also says much more needs to be done to increase the supply and the quality of rented housing.

The MPs say 50,000 more homes a year, which is more than are currently being built, are needed in the social rented sector. They also call for greater emphasis to be put on creating mixed communities to avoid vulnerable households being concentrated in areas of deprivation. The committee says the creation of mixed communities should pervade all spatial and housing policy and members want councils to have the freedoms they need to pursue that aim.

The report finds too many flats have been built when family accommodation is needed to reduce overcrowding. It calls for a more strategic approach to the right-to-buy policy so restrictions on sales can be imposed where necessary and it recommends the implementation of a system used in the Netherlands. There, housing providers and local authorities agree on the numbers of homes to be sold in any neighbourhood. The MPs also want moving from one social rented home to another to be made simpler so tenants can move around the country more easily to find work or more suitable sized housing.

Dr Phyllis Starkey, who chairs the committee, said renting was often seen as second best to home ownership but this was an unhelpful perception. “We were particularly struck that the shortage of social housing and the allocation schemes can often have the negative consequences of polarising worklessness and deprivation within an area,” she said, adding, “New social rented housing must be built to encourage mixed communities.”

In looking at the private rented sector the committee found the growth of buy-to-let properties had helped to increase supply but that it had put pressure on housing markets, particularly for first time buyers, and often did not help with the creation of mixed communities.