Chancellor Rachel Reeves is set to dramatically reduce the Right to Buy discount offered to tenants purchasing their council house.

The Government has announced that discounts under the Right to Buy scheme will be reduced ‘so that thousands more council homes remain in the sector.’

Research published in July by the District Councils’ Network (DCN) found that 6,000 council homes were sold under the scheme in England last year and only half of them had been replaced.

The details are expected to be included in the Budget on Wednesday, but the maximum discounts for council tenants will reportedly be cut from 70% to 25%.

Ms Reeves said: ‘We are rebuilding Britain by ramping up housebuilding and delivering the 1.5 million new homes we so badly need.’

A housing package was also announced over the weekend aimed at delivering up to 5,000 new affordable social homes with £500m in new funding for the Affordable Homes Programme.

The Government will also consult on a new 5-year social housing rent settlement, which caps the rents social housing providers can charge their tenants.

Cllr Louise Gittins, chair of the Local Government Association (LGA), welcomed the confirmation of reforms to the Right to Buy scheme.

‘It has become increasingly impossible for councils to replace homes as quickly as they’re being sold through the Right to Buy (RTB) scheme,’ she said.

‘The LGA has long called for reform to RTB and these positive measures will support the replacement of sold homes and to stem the continued loss of existing stock.’

Cllr Gittins also said a 5-year social housing rent settlement was ‘a step in the right direction’ but added that a minimum 10-year rent settlement was needed to provide stability to Housing Revenue Accounts.