The Tories' proposed revival of Right to Buy would only add to the scale of Britain's housing crisis

Right to Buy was one of the totemic policies of Thatcherism, embodying the Iron Lady’s philosophy of promoting aspiration, individual responsibility and rolling back the frontiers of the state.

Council tenants loved it – hardly surprisingly given the hefty discounts they were offered. Hardly surprising, either, that David Cameron and George Osborne have tried to remix that cocktail of libertarian philosophy and populism in the new Conservative manifesto by promising to extend the Right to Buy privileges to the tenants of housing associations.

Yet it’s a cocktail that will not go down so easily this time. While hundreds of thousands of families benefited from Right to Buy (and many probably voted Tory through the 1980s on the back of it), the policy helped to create our contemporary housing crisis. The mistake was less in the principle of helping council tenants to become owner-occupiers than in the short-sighted manner in which the policy was implemented. For Thatcher not only allowed tenants to snap up their council homes on the cheap but forbade local authorities from using the sale proceeds to construct more council homes to replace the lost stock.

The consequence is a chronic shortage of local authority accommodation and large waiting lists for those properties that remain. Housing associations – the third-sector bodies promoted by the Conservatives in the 1980s and 1990s to fill the gap in the affordable housing supply – have only managed to do a partial job.

Many beneficiaries of Right to Buy became private landlords themselves or sold their homes on to other private landlords. Estimates suggest more than a third of the flogged council stock is now in the hands of private landlords. And who are their tenants? Families who, in the past, would have been housed directly by councils. Councils now pay for tenants to live in their old housing stock. The difference is that these tenants pay a market rate. So the legacy of Right to Buy, and the collapse of the council housing stock, is an exploding housing benefit bill. That expenditure line is set to hit £24bn this year, almost 12 per cent of the entire welfare bill and up from just 5 per cent in 1980. Right to Buy squashed the Welfare State in one corner but, like a balloon, it merely popped up in another.

The Tories today say that they would replace each housing association residence sold off with a new one, by requiring councils to flog off high-value properties in order to fund new construction. But that’s unconvincing given that less than half of the council housing stock sold under Right to Buy since 2012 has been replaced, in spite of very similar promises from ministers.

The popular mood has changed – not least because private renters now outnumber social renters. An extension of Right to Buy offers nothing to those renting on the open market. It was also notable that the reaction to the Tories’ Right to Buy manifesto pledge from the housing industry was uniformly negative. The hostility from the likes of the Royal Institution of Chartered Surveyors showed, in particular, how times have changed.

The sickness at the heart of housing today is not a lack of aspiration from council and housing association tenants but a chronic shortage of new housing supply. We are simply not building enough new homes. The Tories’ 1980s-infused policy cocktail will do nothing to cure that ailment. Indeed it threatens to make matters far worse.