Council houses will be available to buy at a discount of 70 per cent this year, the Government has announced, while pledging to invest the proceeds in new properties.
Communities Secretary Eric Pickles said there would be a £75,000 cap on the cash value of the discount.
He added that it would also begin increasing in line with the CPI rate of inflation in a bid to revitalise the right to buy scheme, a flagship policy of Margaret Thatcher.
Labour said the Government was failing on its promise to replace each and every home sold under right to buy and reiterated the party’s pledge to build 200,000 homes if it wins power in 2015.
Mr Pickles said increasing the discount on houses from 60 per cent to 70 per cent of the full market price would drive aspiration and allow an acceleration in the rate Government makes new affordable homes available.
The discount now matches that available on flats which are currently available on the market.
He said: “For years the Right to Buy was slowly strangled, with a miserly cap on discounts killing the prospect of home ownership for most social tenants.
“We don’t think governments should be in the business of vetoing aspiration.”
A department spokesman said legislative changes were needed to bring in the increased discount before May.
However the policy announcement failed to win favour with the opposition, with politicians attacking the government over its housebuilding record.
Labour’s Shadow Housing Minister Emma Reynolds said: “The Tory-led Government has failed to build the homes our country needs.
“Housebuilding is at its lowest peacetime level since the 1920s, contributing to the cost-of-living crisis families face.
“David Cameron has also broken his promise to replace every home sold through right to buy with another built. Only one home has been built for every seven homes sold.”
The changes come into affect at the beginning of the new tax year in April.
Mr Pickles said there would be a £100m fund to boost access to mortgages and provide right to buy “agents” to help people through the process.
The Department for Communities and Local Government said 50,000 household had got onto the housing ladder since 2011, including 13,400 via the right to buy scheme.
The 50,000 figure represents the total of new property owner households aided by the Government, not the whole housing market.
The figure also includes at total of 36,000 assisted on to the property ladder through the Help to Buy and earlier schemes.
On Wednesday, the Prime Minister was forced to deny that the scheme would result in another housing bubble, comparable to that seen in the economic crash of 2007/8.