Council tenants who sublet their homes face prosecution and possible prison terms in a blitz on abuse of social housing. High earners could also be forced to pay the market rate for continuing to live in their council homes.
Housing minister Grant Shapps said it was a "scandal" that abuse was costing taxpayers between £5bn and £10bn a year. The Coalition is expected to have consultations ahead of legislation. Any money saved would go towards building social housing.
It is not now an offence to sublet a council house – a loophole that allows around 160,000 tenants to move out and charge rent.
Ministers will also give authorities powers to make wealthy tenants pay the market rate. If they refuse, they face eviction. Officials estimate there are up to 6,000 people in social housing who earn more than £100,000.