Matt Kilcoyne is Head of Communications at the Adam Smith Institute.

Why did Margaret Thatcher win three crushing electoral victories? An important part of the answer has to be her Right to Buy policy, which gave council tenants a legal right to buy their home with a discount on the market value. It tapped into people’s desire to own a home of our own, because if offered the prospect of financial security and recognised the aspiration to become more prosperous, taking into account the seemingly remorseless rise in property prices.

The policy hadn’t previously been successful in political terms. Labour lost the 1959 election with a right to buy in their manifesto, and the Conservatives lost in 1974, when the pledge appeared in theirs. But they won in 1979 and again in 1983, 1987 and 1992, and many activists can recount stories about former tenants who switched their votes to the Conservatives due to the policy. Control over the details of domestic life, as well as a feeling of ownership of one’s circumstances, is enhanced with owner-occupancy and is frustrated by rented tenure. Extending that control to voters who haven’t previously enjoyed it is handsomely rewarded at the ballot box.

The Right to Buy magic, however, has lost much of its electoral power for the Conservatives. Many of those who wanted to buy their own home and were in a position to do so have done so through a policy that is now nearly 40 years old. But as house prices have spiralled in London and other cities with plenty of jobs, fewer council tenants are finding themselves in a position to be able to take advantage of the policy, and the idea of buying their council home has become fanciful. No wonder the UK is such an outlier in having so many council homes, with a rate higher than all other countries in the EU except Slovenia.

The underlying problem is the high cost of housing, caused by a shortage in places like London where demand is high. That shortage is caused by planning restrictions such as the green belt, and by anti-density rules such as building height limits. But the Government shows little sign of wanting to address this problem head-on – so dealing with its consequences, such as Right to Buy drifting out of tenants’ reach, becomes all the more pressing.

This is why the Adam Smith Institute has proposed extending to council tenants who are eligible for the existing right a new Flexible Right to Buy, which would mean instead of only being able to buy the home they live in, they would also be able to instead transfer the value of their Right to Buy discount and use it towards buying a different, cheaper property which they could afford. The transferred discount would be funded by selling their council home, once they’d moved out and into the home they bought using the scheme. The transferred discount would be funded by selling their council home, once they’d moved out and into the home they bought using the scheme.

London has over 200,000 council homes in boroughs where the average residential property price exceeds £500,000. In England and Wales, 700,000 council homes are in boroughs where the average homes costs over £250,000. That suggests that a potentially very large number of tenants might be excluded from taking advantage of Right to Buy because of its inflexibility. We estimated that as many as 197,000 might take up the Flexible Right to Buy, releasing £83 billion worth of council housing with net receipts for government of £62 billion, after discounts under the scheme. That’s a lot of voters and a lot of money.

As well as bolstering the public finances and satisfying the desires of a great many council tenants, a Flexible Right to Buy could also go some way to cool over-heated local housing markets and improve labour markets. High housing costs tend to be in the areas where the best jobs are. Some tenants might work in sectors where wages do not vary as much from one region to another, while others might have retired or have health problems, meaning that local job markets are not relevant to their circumstances. This explains how the policy could free up homes near where the jobs are available, thus allowing more workers to move and take advantage of them and deepening labour markets while also rebalancing property markets.

Thatcher won over Labour voters with an unashamedly aspirational platform of policies which put choice and power back in the hands of individuals – such as the Right to Buy. If the Conservatives want to learn the lesson from their most successful leader, they should do the same ,and start by introducing a Flexible Right to Buy. If they don’t, they might find voters have had enough of sky-high house prices, and that a canny Labour Party could rediscover its own history – and take the credit instead.