Rachel Reeves is to slash the 'right to buy' discount given to those purchasing their council house in next week’s Budget.
Ministers say the move is designed to “protect” existing stock so thousands more homes remain for rent.
But the cut risks accusations that it is an attack on aspiration.
The move is part of a wider housing package that has been hailed by the deputy prime minister Angela Rayer, who used the right to buy scheme to buy her Stockport house in 2007.
She later turned a £48,500 profit on the house, when she sold it in 2015.
Further details are due to be set out in the Budget, but there have been suggestions that the discount available could be cut from a maximum of 70 per cent to just 25 per cent.
Ms Rayner said the move was part of plans to “deliver a social and affordable housing boom, supporting millions of people up and down the country into a safe, affordable and decent home they can be proud of.”
Ms Reeves will also announce a £500 million boost to deliver thousands of new affordable homes in her statement on Wednesday.
The chancellor said: “We need to fix the housing crisis in this country. It’s created a generation locked out of the property market, torn apart communities and put the brakes on economic growth.”
Under the plans, Right to Buy discounts will be cut and there will be a consultation on a new long-term rent settlement for social housing.
Councils will also be able to keep 100 per cent of the receipts from sales of council houses in a bid to “scale-up delivery” of social housing.
An extra £500m for the current Affordable Homes Programme will also see thousands more houses built.
And there will be a £128 million investment in other housing projects to transform Liverpool’s central docks, build more energy efficient homes and clean up rivers to unlock up to 28,000 new builds.
The £56 million investment in Liverpool, which will also deliver office, retail and leisure facilities, is part of the government’s new “brownfield-first approach”.
Kate Henderson, chief executive of the National Housing Federation, said: “We share the government’s ambition to build 1.5million homes over this parliament and stand ready to deliver the social homes needed, which is why we welcome a consultation on a new rent settlement. This will provide both transparency for residents and long-term certainty and financial stability for social housing providers. We also support the government's decision to review right to buy discounts.
"To achieve the affordable homes needed across the country, alongside this short-term top-up, we look forward to a new long term housing strategy announced at the next spending review, including a significant boost in funding for social housing."
