Revealed: Thatcher's Right to Buy cost taxpayers £194bn
Changes brought in by the Conservative prime minister in 1980 triggered a surge in council tenants buying their homes at a steep discounted rate.
Analysis by Common Wealth, a think tank, estimates these ex-council houses would be worth £430bn today, taking inflation and the rise in property prices into account.
As a result, it claims as much as £194bn of taxpayer cash was effectively given away in free equity through the discount.
Researchers said the findings affirm claims by Lord Michael Heseltine that 'no single piece of legislation has enabled the transfer of so much capital wealth from the state to the people'.
Some 1.9 million council homes in England were sold at an average discount of 44pc of market value. This has contributed to the country's spiralling housing crisis – as the stock of affordable homes was depleted and not replaced, Common Wealth said.
The report added: 'Right to Buy represents two big blows to council balance sheets: the discount giveaway itself, and the forgone appreciation of the assets had they not been sold.'
'Strategic policy failure'
Social housing is becoming increasingly unaffordable for councils, with some town halls turning to private landlords to provide council accommodation.
If the properties were sold at their market value, and this money was 'reinvested in housing equity', it could pay off all council debt nearly three times over. The sum of debt securities and loans across local governments stood at £92bn at the end of last year.
The Right to Buy scheme has long divided the housing industry. Some campaigners have claimed the report shows that 'Right to Buy has been a strategic policy failure'.
Rachael Williamson, of the Chartered Institute of Housing, said: 'For decades, vital social housing has been sold off without effective replacement, costing the public billions and compounding the housing crisis
However the Centre for Policy Studies said the data was 'highly misleading'.
A spokesman said: 'Social housing normally generates no profits at all, so its economic value to its owner – the taxpayer – is approximately zero. The so-called 'discount' was not a discount from its actual value as social housing, but a discount from the hypothetical value it would have had if it were market housing.
'Taxpayers only 'lost' something they had already given away.'
It comes as Angela Rayner is planning to overhaul the Right to Buy scheme and make it harder for tenants to buy their home, despite benefitting from it herself.
The Deputy Prime Minister will extend the minimum time a tenant must live in the home from three to 10 years before they can buy it at a discounted rate.
In 2007, Ms Rayner used the scheme to buy her former council house in Stockport, Greater Manchester, for £79,000 after claiming a 25pc discount.
Rachel Reeves also announced a cut to the maximum saving from £136,400 to £38,000 in the Budget, leading to a surge in demand from tenants racing to buy.
In July, The Telegraph revealed that almost 130,000 households in taxpayer-subsidised homes earned at least £71,344 last year. It means 3.2pc of those renting from local authorities are among the country's top earners.
Kevin Hollinrake, chairman of the Conservative Party, said at the time: 'With over a million households on the social housing waiting list, it's impossible to justify high earners remaining in taxpayer-subsidised homes.
'Government subsidies should be focused on those in greatest need. Social housing exists as a safety net, and resources should be targeted at the poorest to ensure the system remains fair and effective.'
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