Housing association chiefs have condemned as ‘preposterous’ Conservative plans to extend the Right to Buy scheme and give housing association tenants the opportunity to own properties they currently rent.

The comments follow eye-catching proposals floated by welfare secretary Iain Duncan Smith for inclusion in the Conservative election manifesto to ‘gift’ tenants their council home after a year in employment.

Such tenants would become ineligible for housing benefit and be forced to surrender up to 35% of sale proceeds in tax if the property was sold on within three years.

Revenues raised would be reinvested in the housing market, and Conservative policy experts have calculated the savings from the £23bn annual housing benefit bill and sales tax income would, with the help of inflation, outweigh the costs.

It is understood the ideas have been seized upon by Conservative election strategists keen to attract skilled working class voters from Labour and UKIP and emulate the popular success of Margaret Thatcher’s popular Right to Buy policy.

Currently Right to Buy provisions are restricted to around two million council owned homes. But if enacted the move could deliver a massive boost to home ownership among low-income workers struggling to secure a place on the property ladder and a mass transfer to tenants of an estimated 2.5 million housing association homes.

But David Orr, chief executive of the National Housing Federation, said: ‘We fully support the aspiration of homeownership, but not at the expense of the 1.7 million people currently waiting for desperately needed social housing across England.

He added: ‘Giving away housing association homes is so preposterous, it cannot be considered a serious solution to our housing crisis. We need a long-term plan to end the housing crisis within a generation not exacerbate it.’