Osborne's social rent cuts 'will make housing crisis worse'

And Mr Farron took aim at the Chancellor's summer Budget announcement last year to cut social rents for tenants, telling MPs the move will have a dramatic impact on the ability of housing associations and councils to build much-needed new homes.

He said: "A 1% cut in social rents is a good thing if it is done fairly but the Government did not do it fairly. They chose instead to be generous with other people's money.

"A rent cut is right but to make housing associations and the often vulnerable users of their services pay for it is pretty mean and massively counter-productive."

Mr Farron said the reduction in revenue will force councils and housing associations to scale back their plans.

"At a time when councils should be expanding their building projects they are being forced to cut back," he said. "Consequently the housing crisis is set to get even worse."

But Simon Hoare, the Tory MP for North Dorset, said he believed housing associations would "rise to the challenge" and that the "terrible scenes" put forward by Mr Farron would not happen.

The Lib Dem leader said he did believe housing associations will "make the best of things but they will be doing it despite the Government not because of it".

Mr Farron used the Liberal Democrats' first opposition day debate of the new Parliament to call on the Government to lift the borrowing cap on councils to enable them to "borrow to build".

He also called for 10 new garden cities to be built.

He said: "For decades successive governments have not built enough homes leaving the UK with a crippling undersupply and an industry producing only around half the houses that we need.

"This desperate lack of supply has fuelled rising house prices with millions now priced out of the communities in which they grew up in or indeed the places in which they work."

Meanwhile, Mr Farron said the "lack of affordable housing to rent is at crisis point" as he asked the Government to commit to a major house building programme.

"None of this will be fixed by accident and none of this will be fixed by blinkered ideology either," he said.

"Put simply we need house building on a scale not seen since the post-war housing crisis was alleviated by Harold Macmillan whose wise, effective and dogma-free pragmatism saw the building of 300,000 homes a year - the same number incidentally that Liberal Democrats have been calling for and continue to call for to tackle our present housing crisis."

Mr Farron also attacked the decision to extend the Right to Buy policy to housing association tenants, telling the House that funding the scheme by selling off high value council housing is an "outrage".

Mr Farron said: "Britain should be a place where affordable housing is available for all to rent or to buy, no matter what the circumstances of your birth but Britain is not such a place. It is time to put ideology and party politics aside and to build the homes that Britain needs."

Minister of state for housing and planning Brandon Lewis claimed it was the eighth debate about housing in recent months and Lib Dems did not take part in any previous ones.

He said: "We are a One Nation Government and our goal is to have a Britain where everyone who works hard can have that home of their own."

Mr Lewis spoke about the film Goldfish, joking: "Crucially there were just eight people in the official cast."

He said: "This Government is determined that everyone who works hard can have a home of their own, after all 86% of our population want to own their own home. So whoever you are and wherever you live we want to support your ambition and aspiration to own your own home."

The Government was embarking on the largest housebuilding programme "for some 40 years", he added, with an aim to build a million homes by 2020.

Mr Lewis referred back to the situation in 2010, he said: "It is frankly terrifying to think where we would be today if we had not gripped these problems and applied the right solutions. In the last Parliament the number of first time buyers doubled, the number of new homes built doubled, public support for new housebuilding doubled.

"We have helped over 270,000 households buy a home with Government schemes, provided over 270,000 affordable homes for rent with nearly one third of those in London and we are the first Government since the 1980s to finish their term with a higher stock of affordable homes."

Twice as many council homes were built during the Coalition's five years than during 13 years of Labour, he added.

Former Lib Dem leader Nick Clegg intervened saying the Lib Dems were "very proud" of that record, but said: "It is a radical departure from that record to move from Help to Buy, something which the coalition Government used to spread opportunity to buy homes to so many people across the country, to Right to Buy which will only help a tiny, tiny fraction of people and will do nothing to those facing very very high rents and do nothing to build more homes in this country."

Mr Lewis said although Government's housing plans were delivering there was a need to "do more" and it was determined to reverse the slide in home ownership.

He said: "It would be simply old fashioned political dogma to insist Governments only intervene in the market to support renters when most people want to buy."

Mr Farron argued one in three homes bought under Right to Buy so far were now private rents.

Mr Lewis replied he would defend a homeowner's right to do with their home what any other homeowner can do.

Shadow communities and local government minister Teresa Pearce said rent costs were rising, with poor standards in the private rented sector, plus increasing homelessness.

She said: "A Government committed to see the end of the social housing sector as we know it and fewer homes built than at any time since the 1920s and a generation of young people priced out of the property market."

Conservative Richard Bacon (South Norfolk) said: "The truth is that our housing system at the moment, the one we've endured for 50 years, is intellectually, socially and morally bankrupt.

"It's intellectually bankrupt because the supply of housing does not rise to meet demand.

"It's socially bankrupt because not having enough housing is so extraordinarily divisive and limits opportunities.

"And it's morally bankrupt because it's a disgrace that a country like ours can't supply enough decent housing for everyone to have somewhere to live - and in a country where most people, the vast majority of people want to own their own house but house ownership is going down rather than up."

Mr Bacon said the Government is starting to address the problems with the "radical" solutions which will make the difference.

Julian Knight, the Tory MP for Solihull, praised the Government for extending Right to Buy.

He said: "Owning a home is a great thing - I think it's a moral good. It has raised the wealth and life chances of millions.

"I'm from a council house background like many people on this side of the House and without the property owning democracy of the 1980s I would not be stood in this place today, such are the opportunities that have arisen in my life and for my family."

Intervening, Mr Bacon, suggested that some of the strongest opponents to the extension of the policy are people who come from privileged backgrounds.

He said: "Do you think that it is instructive that we have had a number of contributions from this side from people who were themselves brought up in council houses and those who are so strong in opposing Right to Buy... have come from very wealthy backgrounds where they have been to some of the top public schools where it's never been an issue for them whether they might one day have the chance to own their own house or not."

Mr Knight replied: "I completely agree with you. I have to say it really is quite the most ridiculous type of politics where... those on the housing ladder look to pull it up and therefore not allow others onto the housing ladder.

"I just think that's terribly two-faced and entirely wrong in that respect."

A Liberal Democrat motion calling on the Government to set out a long-term housing plan was defeated by 274 votes to 15, a majority of 259.