UK election resurrects ghost of Margaret Thatcher

Catherine Boyle and Hannah Wood

The Conservative Party is going back to the 1980s by trying to win aspirational working-class voters through extending a flagship policy of the Margaret Thatcher government.

Prime Minister David Cameron, who is fighting to keep his job in one of the closest U.K. elections for decades, launched his party's election manifesto Tuesday with the Right to Buy extension a key pillar of policy.

David Cameron tried to hit the same feel-good, aspirational note as his predecessor Thatcher, with her appeal to working and middle-class voters. He claimed his party was "the real party of working people".

Johnny Eggitt | AFP |Getty Images

First launched in the 1980s, Right To Buy allowed families in state-owned housing to buy their homes.

Now tenants in "social housing" properties owned by private non-profit housing associations (around 1.3 million people in the U.K.) will be able to buy their own homes in the same way as council tenants.

More expensive properties would only be sold once the tenant vacates, and then housing associations would have three years to spend the money on building new homes. The most valuable homes would likely be in London.

On Tuesday, Home Secretary Theresa May said that Conservative housing initiatives had encouraged home building—a particularly hot topic in London where there is a shortage of a affordable housing.

"What we've seen over the last few years is actually the government putting in place a number of schemes that have encouraged house building," she told CNBC from the town of Swindon in South West England, where the prime minister will launch the Tory manifesto.

"We've seen the release of land, for example the government land that is no longer needed, to provide sites for housing taking place. And we've seen help for people to get their foot on the housing ladder, through schemes like the Help to Buy scheme, helping particularly first time buyers," she added.

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May said her party planned to regenerate brownfield land sites, which could lead to the building of 400,000 new homes over five years.

"So [we'll see] more homes, more people housed and more people owning their own home," she told CNBC.

The original Right to Buy policy was an important part of the Conservative Party's appeal to aspirational working-class voters, Tenants were able to buy their homes at a discount to market value.

It has also been credited with making the U.K.'s economy too reliant on the housing market, with more than half the country's wealth tied up in property.

Right to Buy

Theresa May defends right-to-buy scheme

Housing associations have already warned that the new policy could cost £5.8 billion ($8.5 billion) via subsidies to the home buyer.

Labour have already attacked the policy as "half-baked" and pointed to the relatively slow pace of housebuilding (which is still not back to pre-credit crisis levels) under a Conservative-led government.

"The figures simply won't stack up," Gavin Smart, deputy chief executive of the Chartered Institute of Housing, said in a statement.

However, the policy is likely to be popular with voters, and polls suggest both Conservative and Labour are struggling to gain an edge.

One poll, released by ICM Monday night, put the Conservatives a six-point lead with 39 percent of the vote, which helped sterling to edge higher on Tuesday morning, but the majority of polls suggest a close race between the two.

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Ed Miliband, the Labour Party leader, gave a more assured performance than in previous appearances when he launched his manifesto on Monday.

Miliband's personal poll ratings have consistently been lower than Cameron's, so any rise in his personal popularity will make the Conservative Party nervous.