Two-year contract plan for council house tenants

New council house tenants could be kicked out of their homes after as little as two years under Government plans.

In a move that will anger some Liberal Democrat MPs, coalition moves to put an end to lifetime tenancies will go even further than previously indicated.

Prime Minister David Cameron has already said he wants an end to council tenancies for life and the introduction of fixed-term contracts of "five or 10 years".

But, under reforms to be announced on Monday, councils and housing associations will be able to offer contracts of just two years.

Tenants whose financial circumstances have improved could then be evicted, although they would be entitled to at least six months' notice.

Councils and housing associations will also be able to charge rent of up to 80% of the market rate so that they can raise money to buy new properties.

The changes will only apply to new tenants - those already on lifetime tenancies and social rents will keep their current contracts.

Ministers will insist the moves will make the system fairer, by giving social housing landlords more flexibility in trying to accommodate people with the greatest need. There are five million people on waiting lists for social housing.

But the plans are likely to inflame coalition tensions. Lib Dem deputy leader Simon Hughes insisted the move to introduce fixed term tenancies was the policy of neither the coalition nor his party when it was raised by Mr Cameron in August.

It is thought that the Government wants to implement the changes - which apply to England only - as early as next year.