More repossessions could increase the demand for social housing
One million more people in England could be on the waiting list for social housing within two years, council leaders are warning.
About 4m people are now waiting for a council or housing association home, and the Local Government Association expects this to reach 5m by 2010.
Factors driving demand include high house prices, the credit crunch, and fewer new homes being built, it says.
Ministers say they want to build 70,000 affordable homes each year by 2011.
This would include 45,000 social homes for rent.
In a report to be published later, the LGA will say almost half of councils are struggling to meet the demand for social housing.
It is calling for councils to be given greater freedom to increase their housing stock by being able to borrow freely and remortgage assets to reinvest.
Paul Bettison, chairman of the LGA's environment board, said councils had been "hamstrung" by the lack of freedom to borrow against council assets to invest in building or buying new homes.
"With the banks overstretching their credit facilities, it could well mean that in the coming months councils will have to help pick up the pieces as people end up on social housing waiting lists," he said.
The government said it had just earmarked a fund to help housing associations buy unsold homes on the market.
Housing minister Caroline Flint said: "The demand for more housing, including social homes, isn't new.
"We welcome the LGA's backing for government investment to provide 70,000 affordable homes a year by 2011, including 45,000 social homes for rent.
"I hope they will be instrumental in persuading their member local authorities to support plans for increased housing supply to meet the needs of local families on housing waiting lists."
Earlier this week, Ms Flint was photographed carrying Cabinet briefing notes which indicated UK house prices could fall "at best" by 5-10% this year.
The note also expressed concern over housebuilding - suggesting the government could struggle to hit its target of building three million new homes by 2020.
Liberal Democrat housing spokesman Lembit Opik said: "Ministers should feel ashamed for presiding over a doubling in the social housing waiting list since Labour came to power."