Everyone is familiar with the struggle of Generation Rent. Even readers who are owner-occupiers will have friends or relatives who have seen their rents rise to eye-watering levels. No one could fail to have sympathy with their plight. But if we are to have any chance of solving the problem, we must understand what has really caused it.

In London – where more and more people are being driven to rent at ever higher prices – two factors have come together to produce a crisis. The first is the sheer popularity and success of the city. London is the most dynamic urban economy in Europe, with a growing population and an enormous demand for housing. And that demand has been exacerbated, secondly, by the total failure of the previous Labour government – in which Ed Miliband served – to build enough homes. Don’t just take it from me. As Miliband admitted himself in 2010, after he had been (rightly) kicked out of office: “We refused to prioritise the building of new social housing”. Or as Ed Balls put it: “Labour was wrong…We were late in recognising the importance of building more homes, and more affordable homes.”

How many houses are we building?

ONS

One of the Labour members of the London Assembly, Tom Copley, has even called for the party to apologise for its failure to build more homes. As you might expect from Labour politicians, they are in fact understating the scale of the disaster, or their role in it. In the 13 years of the Labour government, housebuilding plunged to its lowest level since the Twenties. They saw the number of available affordable homes fall by 200,000; and indeed – this is the statistic that should really make them hang their heads with shame – they built fewer council homes in 13 years than Mrs Thatcher did in one year of her premiership.

Nor were things any better for those looking to buy on the open market: under Labour, the number of first-time buyers collapsed to the lowest levels since the Seventies; and perhaps no wonder, when you consider that Labour has always been suspicious of home-ownership – and the feelings of pride, autonomy and independence that go with it. In short: Labour failed dismally to build enough homes during the long years of the boom – and it is that failure we Tories have been trying our utmost, and with increasing success, to rectify.

In London, we are well on target now to deliver a record 100,000 new affordable homes over the life of this mayoralty; and there are more homes being built – just look at the cranes – than at any time since the early Eighties. These homes are for social rent, for part-buy-part-rent, for market sale and for market rent. For years now, we have been working to get the big pension funds and insurers to use their billions for the good of this country – by funding the building of tens of thousands of good new homes, for private rent, on brownfield sites. We are finally getting there. We have about 13,000 new rental homes in the pipeline – and the fear is that if their rents are unfairly controlled, these investors will just walk away; construction will halt; and we will be back to the inertia of the Labour years.

Now I suppose you might not care much about killing off new supply; you might think it would be a fine thing just to clobber existing landlords, force them to hold down rents. The result, alas, would be the exact opposite. All experience, in Britain and around the world, has shown that rent-controlled landlords let their buildings decay; and far from holding down rents, the three-year freeze would simply encourage landlords to whack them up sharply at the beginning and the end of the tenancy. This policy means higher rents, fewer homes, and general dilapidation. Like so much of Miliband’s agenda, it means going back to the Seventies.

It is not the way forward for Britain. The way forward is to build hundreds of thousands of higher-quality homes, including for market rent; to insist that landlords conform to the London Rental Standard in maintaining their properties; and to help people – as we are – with their rental deposit, interest-free. With the pressures now on the housing market, it is mad to pursue policies that would actively throttle new building and throttle the rental market, and if Miliband won’t listen to me, he should pay attention to his ideological kinsmen in formerly commie Vietnam. This isn’t a new policy. Lefties have been there, done it, and they know it is a disaster.

There is no suggestion of a coup against Mr Cameron, with those involved describing the talks as “sensible contingency planning” in case the party needs a new leader quickly. Mr Cameron himself has suggested that he would have failed as leader if he is unable to form majority government after the election.

The Telegraph has spoken to senior Conservatives from different parts of the party – ministers, backbenchers and party officials. Several suggested that Mr Cameron could step down even if the Tories win more seats than Labour at the election.

One option being examined is for Mr Cameron to remain Prime Minister for a short period while the Conservative Party arranges a “coronation” for Boris Johnson as leader, who would then take the premiership and try to assemble a Tory-led minority government.

Another scenario would see the Conservatives decline the chance to try to form a government if the numbers were not in their favour, instead allowing Labour the chance to do a deal with the Scottish National Party in the hope that the new government would quickly collapse.

Polling analysis suggests that the Conservatives could well be the largest party in parliament, beating Labour but still falling short of a Commons majority of 323 seats.

^{Boris Johnson at a children’s play centre in Surbiton}

However, the party’s ability to form a government could be limited by its potential partners.

Of the smaller parties, only the Liberal Democrats and the Democratic Unionists have suggested they could be willing to work with the Tories to support a minority government. Those two parties are expected to have fewer than 40 seats between them on current polling.

Some senior Tories are sceptical of whether the Lib Dems would actually back a Tory government, given the political harm the party suffered from its last coalition deal with the Conservatives.

Labour, by contrast, could work with the Lib Dems and the SNP, who between them could have 80 MPs, likely to be enough to give a minority Labour government a working majority in the Commons.

Mr Cameron took the Tories into power in 2010 despite failing to win a majority.

As the incumbent Prime Minister, Mr Cameron would have the first attempt to form a government in a hung parliament after this election.

But one senior Tory figure suggested that, if the Tories had most seats but not enough allies for a clear majority, the party might decide to remove him rather than let him make the attempt.

Instead of a formal vote of no confidence, a delegation of senior MPs would tell Mr Cameron to resign, under this plan.

MPs believe the PM would not resist. They noted that in a BBC interview last week, he appeared to accept that if he did not win a majority he would have failed as a leader.

“If the numbers aren’t there, there would a very strong argument for saying ‘You’ve now failed to win two elections in a row – time’s up”.” said the senior Tory.

Some Tories believe that a Labour government backed by the SNP would very unstable and potentially collapse within months.

• The 10 Ukip targets seats that could make Nigel Farage the kingmaker

• The 7 constituencies that could leave the Lib Dems a laughing stock

Under current laws, that would not automatically mean a new election, but might give the Tories another chance to try to form a government.

Some Tories want to make sure the party is ready with a new leader – Mr Johnson – as soon as possible after the election.

The last Conservative leadership election took two months as MPs held several ballots to select a shortlist of two that was then put to party members in a postal vote.

One minister said that Mr Johnson now has a “very well organised team in place” to make him leader quickly after the election.

• The 10 seats the Greens could win

The team is said to include at least one Cabinet minister and several well-placed MPs, as well as leading Conservative thinkers and pollsters.

“They’re ready for all the options,” said the minister. “There is talk of Boris being appointed by acclamation.”

One option would see Mr Cameron resign as leader quickly after the election but stay on until Mr Johnson was “acclaimed” Tory leader without a formal election among the full party membership.

That might mean a quick vote among MPs, or even a return to the Conservative tradition of a “magic circle” of grandees picking a leader, a practice that continued until 1963.

If Miliband is to occupy Downing Street, he will have to do it either by means of a formal coalition with Salmond/Sturgeon, or with an arrangement called confidence and supply, by which the Scots Nats agree to help knock his legislation through the Commons.

It is therefore obvious to every serious political analyst that he would be in many ways the plaything of the SNP. Unless he has the support of that 40-plus bloc of Scottish secessionists, he will be stymied. If Miliband somehow manages to form a minority government, he will be peeping from Alec Salmond’s sporran like a baffled baby kangaroo. He would be the vacillating Macbeth, pushed hither and yon by Lady Macbeth, in the form of Nicola Sturgeon.

Did you see her the other night, telling him to man up, to screw his courage to the sticking place – to do what she told him to do because “you are not strong enough on your own”? The awful truth is that she is right. Without her help and her say-so, and without the support of Salmond and his troops in the Commons, there is not a single bill that Labour could get through. It is a recipe for chaos; and worse than chaos – because the SNP has changed over the years.

The reason they have lampreyed the life out of Labour in Scotland is that they have become ever more Left wing. Miliband is already the most Left-wing Labour leader since Michael Foot, promoting an agenda that seems to be avowedly hostile to wealth creation and “predatory” capitalism. The SNP are Lefties on steroids. They want to abandon any attempt to get the deficit under control, and indeed the Treasury has calculated that they would borrow another £148 billion.

They think taxes are far too low in Britain, and would seek new “progressive” taxes on top of what Labour is already proposing. They would scrap Trident, denuding Britain of its nuclear deterrent and sending future prime ministers naked into the conference chamber. The SNP would junk all attempts to reform the welfare system – even though they have the support of most voters in this country, and indeed most Labour voters.

They seem to dislike anything to do with America or free trade, and so would ditch the Transatlantic Trade and Investment Partnership, even though the deal would be good for the UK economy. On many of these issues they would of course be opposed, initially, by many Labour MPs. But what could they do? Unless Miliband plays ball, he will be powerless to legislate. He would lose the confidence of parliament, and he would be chucked out.

Yes, he will be sitting in the driving seat, pretending to be steering the car – but all the time he will have clever Nicola next to him, whispering in his ear, and perpetually yanking the steering wheel to the Left. Eventually there will be another terrible crash, just as there was in 2008/9.

But why should the SNP care a hoot about that? There is a grim sense in which the worst outcome for the UK is also – for a party that wants to break up the UK – the best.

Miliband’s proposed deal with the Scots Nats is like the fable of the frog that agrees to carry the scorpion across the river. In the end he will get stung – because that is the nature of the beast.

The risk is that by the end of this calamitous partnership there will be so many people in England who are cheesed off by the SNP’s behaviour that they will be only too happy to bid Scotland goodbye; and anybody thinking of voting Ukip should realise that by putting in a Labour/SNP alliance they are going to turn the UK into the Former UK, and their party will have to be called FUKIP.

Keep the Tories and you keep the Beefeaters guarding the Tower; you let farmers protect their chickens with their own shotguns; you keep out Attila and other roaming Eastern European criminals with tougher immigration controls; you keep Britain’s booming breweries and distilleries exporting overseas with ever-greater confidence; you repair the church tower with the VAT refund introduced by George Osborne – and as for the crèche that was in danger of being run by Herod, you fund ever better child care with the 30-day free care announced in the manifesto.

Vote Tory to stop a Labour/SNP coalition from wrecking the country – a choice, as I may have mentioned before, between competence and chaos.

That house is no swankier than an identical house in a cheaper part of the country, and indeed it is still the same house that you bought all those years ago. It still has a worrying damp spot in the bathroom and it still has a couple of tiles missing from the roof – but irrespective of any defects it may or may not possess its value has maintained a continuous and fairly vertiginous upward trajectory.

You don’t think an ordinary home in London could be hit by this tax? You think I must be talking about rich people? Well, let us look at the story of London house prices since 1983, when the Halifax building society started recording them. In that year the average purchase price for a property – across all buyers and house types – was a derisory £38,000.

Then of course the economy started to roar away. We had the Big Bang, the rise of popular capitalism; we had growth in the London population and the return of confidence in the city. By 1989 that same average home was worth an astonishing £102,000. It had more than doubled in just six years – and then there was the bust of the early Nineties. Property prices tumbled in a recession that was exacerbated by the ERM and high interest rates. Everyone who wishes that house prices could fall again should remember that time, and be careful what they wish for. It was a pretty grim period, of very high unemployment, massive repossessions, and much economic grief.

By 1995 that average London property was worth only £77,000. It was the following year, however, that things really started to pick up. The economy was being well managed by Ken Clarke. Interest rates were back down, and an amazing 12-year boom began, as the incoming Blair government enjoyed the fruits of Tory reforms and a propitious global economy.

Here is how that average London house price performed, year by year, during that complacent epoch from 1997 to 2007: £96,000, £104,000, £121,000, £144,000, £158,000, £185,000, £219,000, £241,000, £258,000 £270,000, £314,000. And then of course there was the crash of 2008, as Gordon Brown, Ed Balls and Ed Miliband collectively drove the economy off the cliff.

By 2008 they had succeeded in bringing the average price down to £251,000 – and were rightly booted out of office. Since then there has been a recovery, and last year for the first time the average house price in London was above pre-crash levels at £356,000. It is vital to stress that these extraordinary house prices are very far from unalloyed economic good news.

These values are now many multiples of average incomes. It is grotesquely unfair to millions of young people, who feel they have no hope of getting on the ladder as their parents did. We need to tackle the problem, as we are, by making more homes available, of all types. We are building record numbers of homes – more this year in London than since 1980; we have built record numbers of affordable homes, and we can do it on brownfield sites: there is scope for about 400,000 new high-quality homes just on London’s brownfield land.

We must insist on steep taxes on foreign buyers who invest in flats but leave them empty – and all London boroughs should be making use of their existing powers to levy a punitive council tax. We cannot have homes being marketed overseas before they are advertised to Londoners – an outrageous and long-standing practice that developers agreed to drop last year.

And we must stop the injustice by which London families are being forced by inheritance tax to sell off the family home simply because it was their fate to grow up in London, the most successful urban economy in Europe. It wasn’t their fault, or their parents’ fault, that the asset should have appreciated so fast – with the digits almost visibly spooling round in the estate agents’ windows as Mavi Unlimited Inc for example.

With the average London purchase price last year at £356,000, it is now literally true that a tax intended for the very rich is now hitting ordinary families in average homes. It is entirely right that this tax cut should be funded by changes to the pension arrangements of the tiny minority earning over £150,000. The Conservatives are helping huge numbers of people to pass on a little bit more to their children. They are supporting a natural human instinct. Inheritance tax has been falling on the wrong people. If the Tories win, an injustice will be righted.

You don’t think an ordinary home in London could be hit by this tax? You think I must be talking about rich people? Well, let us look at the story of London house prices since 1983, when the Halifax building society started recording them. In that year the average purchase price for a property – across all buyers and house types – was a derisory £38,000.

Then of course the economy started to roar away. We had the Big Bang, the rise of popular capitalism; we had growth in the London population and the return of confidence in the city. By 1989 that same average home was worth an astonishing £102,000. It had more than doubled in just six years – and then there was the bust of the early Nineties. Property prices tumbled in a recession that was exacerbated by the ERM and high interest rates. Everyone who wishes that house prices could fall again should remember that time, and be careful what they wish for. It was a pretty grim period, of very high unemployment, massive repossessions, and much economic grief.

By 1995 that average London property was worth only £77,000. It was the following year, however, that things really started to pick up. The economy was being well managed by Ken Clarke. Interest rates were back down, and an amazing 12-year boom began, as the incoming Blair government enjoyed the fruits of Tory reforms and a propitious global economy.

Here is how that average London house price performed, year by year, during that complacent epoch from 1997 to 2007: £96,000, £104,000, £121,000, £144,000, £158,000, £185,000, £219,000, £241,000, £258,000 £270,000, £314,000. And then of course there was the crash of 2008, as Gordon Brown, Ed Balls and Ed Miliband collectively drove the economy off the cliff.

By 2008 they had succeeded in bringing the average price down to £251,000 – and were rightly booted out of office. Since then there has been a recovery, and last year for the first time the average house price in London was above pre-crash levels at £356,000. It is vital to stress that these extraordinary house prices are very far from unalloyed economic good news.

These values are now many multiples of average incomes. It is grotesquely unfair to millions of young people, who feel they have no hope of getting on the ladder as their parents did. We need to tackle the problem, as we are, by making more homes available, of all types. We are building record numbers of homes – more this year in London than since 1980; we have built record numbers of affordable homes, and we can do it on brownfield sites: there is scope for about 400,000 new high-quality homes just on London’s brownfield land.

We must insist on steep taxes on foreign buyers who invest in flats but leave them empty – and all London boroughs should be making use of their existing powers to levy a punitive council tax. We cannot have homes being marketed overseas before they are advertised to Londoners – an outrageous and long-standing practice that developers agreed to drop last year.

And we must stop the injustice by which London families are being forced by inheritance tax to sell off the family home simply because it was their fate to grow up in London, the most successful urban economy in Europe. It wasn’t their fault, or their parents’ fault, that the asset should have appreciated so fast – with the digits almost visibly spooling round in the estate agents’ windows.

With the average London purchase price last year at £356,000, it is now literally true that a tax intended for the very rich is now hitting ordinary families in average homes. It is entirely right that this tax cut should be funded by changes to the pension arrangements of the tiny minority earning over £150,000. The Conservatives are helping huge numbers of people to pass on a little bit more to their children. They are supporting a natural human instinct. Inheritance tax has been falling on the wrong people. If the Tories win, an injustice will be righted.

In our lifetimes, alas, we have seen how it temporarily lost that crown. For much of the post-war period, few would have been so foolish as to rate London above New York. We lagged behind in dynamism, in entrepreneurial spirit, in sheer energy – not to mention GDP.

Today, however – well: it is clear that in many key respects it is London that now has the lead.

It is not just that the British capital still has the largest financial sector on earth, with probably about 320,000 people involved in one way or another. I read somewhere that there are more American banks established in London than there are in New York itself, and London does far more currency dealing. Britain’s capital now has a bigger tech sector, with about 528,000 people employed in all manner of start-up industries, and a creative sector expanding so fast that in the next 10 years we will probably make more TV and feature films than either New York or indeed Hollywood.

We have more museums and galleries than New York; we have more live music venues. We have more world-class universities in London than there are in New York – four of the world’s top 10. We have more World Heritage sites, twice as many bookshops, far more bars and pubs, and a much lower crime rate (the murder rate in London was last year the lowest since the Sixties, and less than a third of the rate in New York), not to speak of wonderful taxi drivers who are obliged by law – unlike those in New York – to know where they are going; and a Tube network that is running ever faster and more efficiently; and if you add all these factors together you can see why people are so keen to come to our city.

David Cameron with Bloomberg in 2010

Last year London hosted 18.6 million visitors from overseas, beating the record achieved in 2013. It is now the world’s number one destination for international tourists – and all the cash they bring – knocking Paris and New York off the pedestal. That is to the best of my knowledge the first time in recent history that London has come first in this fundamental criterion of global popularity.

So let me say to Mike: you have done the apprenticeship, and done it with great distinction. Now is the time to step up to the plate, and take on the fastest-growing and most dynamic urban economy in Europe.

You will, of course, find many friends here – and, indeed, with your work at the Serpentine Gallery and on other projects you already contribute hugely to London life, and you know how much we have in common. Both New York and London are cities that boast their diversity, with about 300 languages spoken in each. We constantly imitate and learn from one another, in a spirit of friendly rivalry. We have both put in bike-hire schemes (ours, I think, a couple of years ahead of yours); we both pursue strategies of urban greening; we are both battling to improve air quality. We are both struggling to cope with the problems of success – above all, to satisfy the demands of all who want to live and work here by building enough affordable housing.

Another American politician admires one of London’s bikes for hire

Each city has an amazing future – according to all reputable analyses – as a powerhouse of wealth creation and innovation. But before you start your campaign, dear Mike, there is one cloud on the horizon, one way that London could go backwards to the Seventies, and that is if the people of this country are so mad as to elect Ed Miliband next month. Labour’s policies would damage our universities, by depriving them of vital revenue for investment in teaching. Labour would hit financial services and jeopardise the jobs of thousands who are by no means affluent; and above all a Labour government would pursue policies of taxation and regulation that are diametrically opposed to the spirit of enterprise that enable you to build your own empire.

It would be a great thing to enter the glass spheroid in Southwark and become Mayor of London, Mike. But first we need to ensure a sensible Conservative government on May 7.

Sign up to The Telegraph politics service on WhatApp