Councils must be able to retail all the money generated when a social housing tenant chooses to purchase their home, officials have insisted.

The current Right to Buy system was designed to ensure the proceeds of any sales were put towards building new homes on a like-for-like basis.

However, a Freedom of Information request has revealed that nearly a quarter of the money raised through Right to Buy sales over the last two years has gone to the Treasury, Inside Housing reports.

The Local Government Association has therefore insisted that councils must be able to keep all the money raised in order to support further housing development.

Peter Box, housing spokesman at the body, said the Right to Buy arrangements at the moment currently "do not allow councils to replace homes on a like-for-like basis".

Gavin Smart, deputy chief executive of the Chartered Institute of Housing, added that he is "concerned" with the existing situation and urged the government to review how receipts are distributed.

Similar calls came from Catherine Ryder, head of policy at the National Housing Federation, who said a review would demonstrate that the government is "serious about meeting its commitment to replace homes sold".

She warned that the way receipts are distributed and the "huge discounts" on offer to social housing tenants make it "almost impossible to replace homes sold through Right to Buy".

The government data shows that of the £1.54 billion generated by 22,900 Right to Buy sales since 2012, councils were left with just £588.3 million. Meanwhile, £358.1 million went to the Treasury.