Mr Shapps said the Affordable Rent programme will allow landlords to offer homes to new tenants at up to 80 per cent of local market rate, with the extra revenue to be invested in new homes.
The Housing minister also confirmed that over the next four years the government will also be investing £4.5billion that will deliver up to 150,000 new affordable homes.
Housing Minister Grant Shapps said:
"With some 4.5 million people on social housing waiting lists, it's clear that not only do we need more homes, but we also need a complete overhaul of the system, to one that offers much more flexibility than the current 'one size fits all' approach.
"The new Affordable Rent scheme launched today ticks both boxes. It offers landlords the freedom they need to offer a range of solutions to people's housing needs, while being able to raise extra rents to invest in house-building.
"This new scheme will provide new affordable homes which could help some of the millions of families currently on housing waiting lists, let down by a rigid, outdated system that is failing to meet their needs. But this scheme is also part of the most radical reforms to social housing for a generation, vital to ensuring that as many people as possible benefit from this valuable resource."
