‘We had two rooms. For five of us. There was a kitchen area, and the living room was our bedroom as well. We had a sofa bed, and we all shared it. And an outdoor toilet, and a tin bath. They’d boil the kettle, and we all had to get in.”

Pat Freeman, 55, is sitting in the front room of her three-bedroom council house near Old Street tube station, central London, keeping one eye on her three-year-old grandson, and recalling the very different place where she spent the first five years of her life: a cramped flat near Angel, north London, which her family finally moved out of 50 years ago, not long after her father had left them.

They were one of the first families to move into Quaker Court, near Old Street roundabout, and just a stone’s throw from the City of London: a newly built, European-looking development, based around dozens of council maisonettes, complete with gardens – and teeming with young families. “You practically knew every kid that was here, and you always had someone to play with,” she says. “The parents got on brilliantly as well. If one of you was having a party, the whole lot of you would go. Do you know what I mean?”

A Quaker Court resident. Photograph: Graeme Robertson/The Guardian

In 1987, her mother was diagnosed with throat cancer, and when she died, Freeman inherited the tenancy, after a nine-month tussle with Islington council. She now lives here with her grownup son, and chairs the estate’s tenants’ management committee, which oversees everything from repairs and maintenance to complaints about noise. The latter, she tells me, is a particularly big issue, thanks mostly to the way the local population has changed.

Whereas residents were once all long-term tenants, in the 35 years since Margaret Thatcher encouraged people to buy – and therefore sell – their council flats and houses, the population of places like this has become ever more transient. In particular, homes that were once council properties are now often owned by buy-to-let landlords who rent them out on a short-term basis.

“Parties,” says Freeman, suddenly looking pained. “There are more and more parties. And people don’t care, because they’re students. If students are renting out a leasehold flat, they don’t care how much noise they make. Most of the tenants who have been here a long time wouldn’t dream of doing it. But the students are only here for six months, a year at most. They don’t care if they upset the neighbours.”

A view of Quaker Court. Photograph: Graeme Robertson/The Guardian

Two minutes’ walk away is the office used by Glyn Robbins, the 51-year-old manager of the estate, which this year sees its 50th anniversary. We may be very near London’s so-called Silicon Roundabout – but, he says: “What you’re in is a fairly traditional, working-class community. There is a lot of effort going into changing that … but they’re the last cockneys, these people.”

He describes the estate’s increasingly mixed-up demographics. From his door, he points out one former council property now owned by an American, who has a share-trading business in his garden shed. “He’s got two computers in there: it’s like a little Wall Street, in the shed of a back garden on a council estate,” he says, marvelling at the very idea. “This is what is happening.”

Houses here, Robbins explains, now sell for anything up to half a million pounds (in fact, if the property website Zoopla is to be believed, even more). The one-bedroom properties and bedsits that were originally intended for older people now tend to be rented privately by young professionals. In the estate’s 76 dwellings, the result is a mixture of affluent homeowners, short-lived private tenants and the 50% of residents who still live in the houses and flats they rent from Islington council: bricks-and-mortar symbols of a century-old staple of the welfare state, which is now under threat as never before.

Campaigners in Brixton, London. Photograph: Philip Robins/Demotix/Corbis

On Tuesday, the House of Commons will once again debate the government’s new housing and planning bill, hyped up as the key to “transforming generation rent into generation buy”, which will supposedly mark another big step towards the age-old Tory dream of a property-owning democracy. But tangled up in its visions of thousands of new “starter homes” – 5,000 more of which were promised on Monday, when the government said it was going to directly commission housebuilding on five sites in the south of England – are an array of drastic measures aimed at what remains of England’s council homes. Labour sees the bill as the work of a government set on nothing less than the end of council housing as we know it – and on the ground, plenty of people agree.

Among the bill’s scores of proposals are a few that cut straight to the heart of what council housing has traditionally been all about. For a start, the government wants to end the system of permanent council tenancies – which was cemented while Margaret Thatcher was in power – and replace it with arrangements that will be reviewed every two to five years, meaning that for new tenants, council housing will no longer represent anything secure or dependable, let alone be passed between generations.

There are also plans to introduce a policy for council tenants known as pay to stay, whereby households that collectively earn more than £30,000 a year (£40,000 in London) could be presented with a choice: either move out, or be charged rents “at market or near market levels” (or, weirdly enough, work less). At the same time – and this is where it all gets almost comically complicated – so as to subsidise housing associations that will now have to sell houses and flats under a newly extended right-to-buy scheme, councils are to be forced to sell their highest-value homes as soon as they become vacant.

No one is sure how any of this will work, and the government seems to making things up as it goes along: on Monday, for example, David Cameron announced that for every high-value council house sold in London, two supposedly “affordable” homes would be built – but there was no suggestion of any kind of like-for-like replacement. The essential story, then, seems pretty clear: a drastic attack on council housing, which will become not just less secure, but restricted to an ever smaller share of the population, just when Britain’s housing crisis has never been more acute.

A council estate under construction in 1947. Photograph: Topical Press Agency/Getty Images

How did we end up here? Just under 8% of us now live in council housing; in 1979, the figure was 42%. From the end of the 19th century onwards, the idea of the state providing people with secure and dependable places to live had steadily gained ground. The origin of council housing lies in the Housing of the Working Classes Act of 1890: three years later, the first council estate – Boundary Street, on the border of Shoreditch and Bethnal Green – was built in east London. By the time Britain entered the era after the second world war, both Conservative and Labour governments were building council houses in huge numbers – indeed, the annual number of new builds peaked under the Tories in 1953 at 220,000.

The history and legacy of all this is a little more mixed than some accounts suggest, partly bound up with the decline of building standards under Conservative rule, estates built on the edge of towns and cities that became bywords for inequality, and high-rise developments that quickly fell into decay. But at the heart of what happened was a simple ideal – of dependable housing for everyone – and a plain social fact: that to live in a council house was perfectly normal.

All that began to change in 1980, when the Thatcher government rolled out the right to buy, an idea that had been around since the late 1950s when a form of it was proposed by the Labour party. This new version was based on huge discounts, 100% mortgages – and the insistence that councils should use the 50% of the receipts they were allowed to keep to pay down their debts rather than building new houses.

Margaret Thatcher visits the Parker family, who were among the first to buy their council house . Photograph: PA

As the writer Lynsey Hanley – whose 2007 memoir-cum-social history Estates remains the modern set text about council housing – puts it, from then on: “People wanted to think of themselves as being self-sufficient units. They didn’t want to think of themselves as having a kind of reliance on the state … It became a fundamental plank of the kind of ‘British values’ culture.” Between 1979 and 2013, 1.6m council homes were sold, numbers of new homes plummeted and council housing went from an inbuilt part of the post-war settlement to something pushed to the social margins.

In the meantime, the term “social housing” entered the British vocabulary as councils were superseded by independent housing associations – whose “assured” tenancies tended to be that bit less dependable than the secure terms available in what remained of the country’s council housing. Indeed, from 1997 onwards, the Blair and Brown governments proved to be more interested in housing associations than the traditional idea of council homes: in the 13 years they were in power, a mere 7,870 council houses were built.

And in popular culture, stereotypes that had been given new life in the 1980s eventually went nuclear: the mid-to-late New Labour period, let us not forget, was the era of Little Britain’s council-estate grotesque Vicky Pollard, the hairstyle maligned as the council-house facelift, and the bundling-up of council housing in the same dread category as “chavs” and welfare scroungers.

Little Britain’s Vicky Pollard (Matt Lucas). Photograph: BBC

The views of council housing in both politics and culture, in fact, were interwined. As Hanley puts it: “There was no urge on Labour’s part to reclaim the best parts of council housing’s legacy … If they’d restored the good name of council housing while they were in power, the Tories wouldn’t have been in such a good position to wreck it now.” (Jeremy Corbyn, by contrast, has said that there is no convincing solution to the housing crisis that “does not start with a new, very large, very active council housebuilding project”.)

No one expected David Cameron and George Osborne to be any kind of friends to council housing, but their record still beggars belief. Government investment in social rented housing was cut by two-thirds almost as soon as the Tory/Lib Dem coalition took power. In 2012, jump leads were put on the right to buy when the maximum discount available to tenants was doubled to £75,000 – and a year later, the figure went up to £100,000 in London. The government accompanied this with a pledge to replace every home that was sold, but at the last count, for every nine houses sold, only one was being replaced.

Which brings us to now, and the latest legislation. “This bill has 33 new powers for the secretary of state over housing and planning,” says John Healey, a Labour MP and former shadow housing minister. He is particularly irate about the new income thresholds for social housing – which, as far as he understands it, will be discretionary for housing associations, but compulsory for councils. “That is going to catch a swath of ordinary-income families: people who are not earning a fortune, are working hard … Their low rents and long-term tenancies are an important part of their lives, and they’ll get taken away. Some of these people are the same ones who would have been hit by the tax credit cuts.”

He points out that the new “starter homes” the government talks about are set to sell for up to £250,000 outside London and £450,000 in the capital itself, which will hardly make them accessible to many existing tenants. All told, he says: “It’s clear to me that the Tories are killing off council housing, and this bill tightens the noose yet further.”

Glyn Robbins, the estate manager. Photograph: Graeme Robertson/The Guardian

Given that Quaker Court’s Glyn Robbins has a PhD – in “mixed-use property development and its place in UK urban policy” – and is a prolific housing activist and blogger, he is probably not your average estate manager, but he says that his job suits him. “I’ve spent time working for councils and being in a big bureaucracy and I struggle with that stuff. Whereas I usually know that what I’m doing here is useful. I can help directly.”

The government’s latest legislation, he explains, could have dire effects on the estate. First, he points out that if councils are forced to sell off their “high-value” homes, places like Quaker Court will be exactly where they will start. “This is about as high-value an area as you’re going to find. So every time we get an empty council flat, instead of that home going to the next person on a waiting list in Islington that has 18,000 people on it, it’s going to be sold into the private market.” This, he says, will inevitably increase the problems bound up with people just passing through, and the estate’s dwindling community spirit.

How many people on the estate does he think will be affected by the new pay-to-stay policy? “I think there’s half a dozen at least.”

And if someone argues that people on a relatively high income shouldn’t be paying such modest rent? “The people we’re talking about aren’t on high incomes. I can give you an example. Between them, they’re earning just over 40 grand, so they fall over the pay-to-stay threshold. At the moment, for a three-bedroom council place on the estate, it’s around £160 a week, all-in with your bills. That’s going to triple, at least: market rent, you’re looking at £600 a week. So, they can stay, and spend God knows what proportion of their income on rent, they can move out – and again, we’ve lost another tenant – or they can do the right to buy. The government would be happy with at least two of those options.”

Quaker Court flats. Photograph: Graeme Robertson/The Guardian

When I ask him about the end of secure tenancies, a measure that was quietly put into the legislation in December, he grimaces. “There’s so much to say about that. It has enormous implications – again, for what we’ve said about the lack of a settled community. That sense of security is the cornerstone on which council housing rests. It’s called a secure tenancy for a reason.

“When I go to America and I talk to them about council housing, they can’t believe it,” he says. “You get a similar reaction to the one you get when you talk about the NHS. And when I say to them, not only are we doing our best to privatise the health service, we’re doing our best to privatise council housing as well, and move to a position where our council housing is as marginalised and stigmatised as their public housing … well, they look at me like we’ve gone mad. And we have.”

He introduces me to 65-year-old Richard Rednall, a retired butler who once worked for a family in Hampstead Garden Suburb. Fifteen years ago, he moved into his one-bedroom flat after arranging a house swap with a couple who were living here with their toddler: they took the two-bedroom council house in Hatfield, Hertfordshire, that he had inherited from his mother – which had a garden – while he was able to be closer to his beloved West End. “My motto is, it’s the council’s property, but it’s my home,” he says. It is beautifully done out: a mixture of deep reds and light browns, with art-deco furnishings, and an array of Rolling Stones memorabilia arranged under a glass-topped coffee table.

I ask him what he thinks about the council-house ideal, and what the government is up to. “We should be building more,” he says. “I get so angry: you see endless amounts of private homes going up, and the people at the bottom – they can’t get a home.”

He looks out of the window at the maisonettes. “It’s ridiculous, isn’t it?” he says. And again I think of the most vivid symbol of this increasingly strange country that I might have ever seen: that shed at the bottom of a garden attached to what used to be a council house, where Quaker Court’s city trader goes about his daily business.