Up to 8,000 state houses could be sold under John Key's radical plan

Up to 8,000 state houses could be sold in the next few years under a radical housing shake-up the Prime Minister today revealed details of in his State of the Nation speech.

The Government is to sell up to 8000 state houses to community providers. Source: 1 NEWS

National's state housing shake-up has proved a difficult sell so far, and protesters in Auckland today waved placards such as "save our state house homes" and "stop tenancy reviews of the elderly".

So John Key today put the issue at the centre of his State of the Nation address in a bid to win back the debate.

"I wanted to sort of round out the narrative on that, if you like," Mr Key told reporters later.

National's vision is to get community housing groups to take over a chunk of the Government's work housing state tenants, with the Government continuing to pay rental subsidies.

"It's why we talk about social housing, rather than state housing, because you no longer actually have to live in state house to get a high level of Government housing support," Mr Key said in his speech to Auckland's Downtown Rotary Club.

He has set out some bottom lines for how it will work.

Only 1,000 to 2,000 state houses can be sold in the first year or so, with possibly more to follow, and the Government to keep at least 60,000 of its 68,000 state houses this term.

Properties will be sold at a discount, but only if it's reasonable value for taxpayers and results in better services for tenants.

Mr Key says that collectively the amount of social housing available to those in need will increase.

"It looks like small numbers," said Labour leader Andrew Little. "But what this signals is a shift by the Government from actually being there to support those that are the most vulnerable and to be a housing provider, to just starting to hand it over to private developers and landlords."

The Salvation Army already provides social housing. It's interested in this new plan but still has doubts.

"There aren't the details and what needs to happen needs to happen quickly for places like Auckland," said Sue Hay, Salvation Army Major.

The Prime Minister is also promising to increase the number of state tenancies which will be up for review this term - 5,000 state tenants will fall into that category.

"While I accept there's always a degree of anxiety if people have to consider moving to another home and work through that process, there's also enormous anxiety from those who can't get a home to live in," Mr Key said.

ONE News political editor Corin Dann says National knows this policy is a bit of an experiment.

"But if he feels the experiment's working, expect John Key to build on it," Dann said.