New tenants will be offered fixed-tenancy agreements of a minimum of two years and could be evicted after that period if their financial situation has improved.

But Housing Minister Grant Shapps insisted the new arrangements will be fairer than the existing system, which has resulted in the waiting list for social homes almost doubling over the past 13 years to five million people.

The current eight million social tenants will not be affected by the changes, which apply to England only and could be introduced as early as next year following consultation.

Shapps said he expected contracts of a “significant length”- anything between five and 20 years – to be the norm under the new system, with some households continuing to get a lifetime tenancy. However, the minimum contract will be two years.

Councils will be able to set their own rules on who gets on to the housing waiting list and a new national home swap scheme will make it easier for tenants to move around the country to find work.

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New tenants will have the right to pass on their home to a spouse or partner on their death, but will no longer be able to pass it on to other family members who lived with them.