A flagship Government scheme to fund new homes by selling off council stock must be changed to reflect London’s housing shortage, Mayor of London Boris Johnson has said.

Both Mr Johnson and his possible successor – Tory mayoral candidate Zac Goldsmith – criticised plans to extend right to buy to housing association as the Bill progressed through the Commons.

The Housing and Planning Bill requires each housing association home sold at a discount to be replaced, with the discount funded by a levy on sales of high value council homes.

Mr Goldsmith said he would table an amendment seeking two new homes for every home sold – because London house prices made this reasonable – although he and Mr Johnson both supported the Bill in priniciple.

Mr Goldsmith said: “London council homes are far more valuable than elsewhere and without a change we are going to see a disproportionate flow of resources out of London.

“So the amendment I will table will ask for a binding guarantee London will see a net gain in affordable housing, a guarantee that, in addition to the replaced housing association homes, London will see at least two low cost homes built for every single high value home.”

Sadiq Khan MP

Mr Johnson said: “It would be the height of insanity to take those funds yielded by those council home sales and spend them outside London on the right to buy subsidy without ensuring that we get, at the very least, a funded commitment for a two-for-one replacement for those homes in London.”

Mr Goldsmith’s chief rival for City Hall, Labour MP Sadiq Khan warned it would make “London’s housing crisis worse”.

He said: “It won’t deliver the genuinely affordable homes Londoners need to buy or rent. It won’t help councils and the mayor start building the homes Londoners desperately need.

“It won’t rein in spiralling rent rises for those in the private sector. It won’t end the scandal of the homelessness problem in London.”

“Isn’t this kind of remarkable that at a time when new homes being built in inner London are being bought by investors overseas this government is now forcing councils to sell family homes to those very same foreign investors at a time when the need for Londoners to have homes that are affordable has never been greater?”