The national government 'confiscated' it. Instead of buying and building new local authority housing it went to national government to 'repay' the annual budgets and loans. Britain lost over 50% of the local authority housing.
Building companies were given land at cheap rates for housing, which instead of building on, they 'landbanked' after gaining planning permission. The top ten building companies own enough land to build over 1.5million properties (which is Labours housing target), and have the cash reserves already to do so, but can't get the skilled workers as they failed to train apprentices, and refuse to build unless they make a profit on sales.
There are some local authorities who have built or are building new properties, but used building companies who weren't part of the landbanking schemes, basically new building firms.
In Norfolk when Right to Buy came to force, an estate of new council properties had just been built in Bowthorpe and Costessey. Tenants were moved into those properties, often from older council houses and the Right to Buy discount meant they got new properties at extremely low prices. The older houses and flats those tenants were in were supposed to be renovated. Some of the areas ended up derelict (Anglia Square)
That is a story in itself.
The Right to Buy scheme meant many tenants bought properties on mortgages that they could never afford, so were repossessed by the banks and building societies and later sold off to just cover the debt. Many private landlords bought numerous properties and made the cost of purchase through renting the houses out. I know of at least one Ipswich landlord, ex bank employee, who owned at least ten properties in Ipswich.