By Gerry Northam
BBC File On 4
The new Prime Minister Gordon Brown has pledged that housing will be one of the main priorities of his premiership.
Right to Buy has increased pressure on council homes for rent
Plans for building more affordable homes to buy or rent are likely to be revealed in the government's housing Green Paper, which is expected to be unveiled early next week.
Government action cannot come soon enough for people who are stuck on council house waiting lists for years or for housing officers who have to choose between those on the list and those in "need."
Latest figures show waiting lists have grown to 1.63 million people.
Minister Margaret Hodge courted controversy earlier this year when she suggested local people should get priority over economic migrants with greater housing need.
The far right looks to have begun to make political capital out of the resentments.
But BBC Radio 4's File On 4 has found it is not just the BNP that is questioning current policies, with MPs and councils around the country claiming the system needs a radical overhaul.
Indeed some councils and local politicians are doing their utmost to stretch the current law to its limits to try to help those kept on the waiting list for years.
The basic dilemma facing councils is who gets priority with a social housing stock which was drastically reduced due to Margaret Thatcher's Right to Buy policy.
Legally, "reasonable preference" should be given to certain categories of housing need including homelessness, overcrowding, insanitary conditions and medical requirements.
A strict application of this priority can leave people like Peter Elsey waiting for years.
Mr Elsey, who has been on a waiting list for eight years, has made nearly 30 bids since 2005 to get a property from Barking and Dagenham Council, which takes in Margaret Hodge's constituency.
Without a permanent base he moves around friends and family - he even sleeps in his van occasionally.
"I've lived in the borough 42 years and been on the list six years.....I will keep bidding but I know I won't get anywhere," he said.
His mum Betty agrees with Margaret Hodge, saying: "People only in the country a short time get first in the queue for everything."
The BNP argues that council housing was the main issue in winning the party 12 council seats in the borough - its best showing in the country.
Local party leader Richard Barnbrook alleged the council favoured migrants over local people.
But David Woods, director of housing, denies this, saying once people are placed in a priority category, time on the waiting list takes precedence when it comes to a bid.
"We're absolutely satisfied the system is fair," he said pointing to the ethnic monitoring statistics which show that minorities only get their fair share of properties.
Elsewhere in the UK, critics such as Birkenhead MP Frank Field argue that the law on social housing turns neighbourhoods with difficulties into sink estates.
Mr Field said it concentrated individuals and families with problems, pushing out "decent families", who lost out on social housing.
"I am saying the law is wrong....we in Parliament should begin to change that law and we should reward citizenship - we should give it greater weight than we should award being deemed homeless."
Such comments are strongly rejected by groups such as the housing charity Shelter.
Adam Sampson, its chief executive, said: "We have a choice whether we meet people's needs or we meet their aspirations.
"Needs must take priority even over people's sense of entitlement but what needs to change is not the law but the supply of housing."
In the absence of legal change, some local politicians have hit on their own solutions.
Sir Robin Wales, the elected mayor of Newham in east London, knows his council has lost legal challenges in the courts over its housing policy, so he is pushing the law to its limits.
His council packs as many applicants as possible into its priority band and then treats them strictly in order of waiting time.
"The law should be changed," he said but until then: "We try and push it the furthest we can because we believe everybody should have fair access."
Coventry City Council, meanwhile, has devised a new system due to begin in September which will see a quarter of all properties allocated to people who have been on the waiting list a long time.
Although the prime minister has yet to flesh out his proposals, one of his academic advisers is warning that difficult decisions over housing allocation will remain.
"It is unlikely that any government will be able to build on such a large scale that it will make social housing available to anyone who wanted it," said Prof John Hills, director of the Centre for Analysis of Social Exclusion at the London School of Economics.
Even if the government pledged to build 60,000 to 70,000 housing units a year, this will only take the UK back to the level of social housing of the 1990s.
"We have already got 90% of the social housing we will have in 10 years' time, so what we do with it is crucial," he added.
Learn more about this story on File on 4, broadcast on BBC Radio 4 on Tuesday 17 July 2007 at 2000 BST and again on Sunday 22 July 2007 at 1700 BST.