A report is recommending radical new ideas to alleviate Britain’s housing shortage – particularly for the less well-off.

In the report, which was commissioned by the Joseph Rowntree Foundation, Professor Duncan Maclennan finds that new housing provision for low income households lies well below the output of the mid-1990s.

The result is that the government is failing to adequately reduce homelessness, while too many young people contend with inadequate homes and poor neighbourhoods, according to the report.

Now Professor Maclennan is suggesting that long-term tenants in social housing could benefit from a share of the increased value of their homes.

"If the widening gap between the wealth of homeowners and those renting is to be halted, we need to introduce mechanisms so that they can benefit from increased values of the homes in which they live," he said.

"This could be translated into providing those who no longer fall within the greatest housing need with a deposit to help them onto the property ladder, thereby freeing up social housing for those in greater need."

Recently Ruth Kelly, secretary of state for Communities and Local Government, claimed Britain is on the verge of a "golden age" in housing policies.