Prescott's £60,000 first-home pledge

FIRST-TIME buyers yesterday were promised high-quality homes costing only £60,000 under a Labour scheme to help people on to the property ladder.

John Prescott at the Labour conference unveiled the ambitious proposals to build 10,000 cheap homes which would be offered to nurses, teachers and council tenants. The homes will be built on surplus public-sector land owned by hospitals, councils and other public bodies.

And, in an effort to keep prices as low as possible, the Government would still own the land on which the homes are built. This means the first-time buyer would pay only for the house itself, not for the land.

The Deputy Prime Minister claimed the initiative would offer thousands the chance to own their own home. But Conservatives and unions bosses claimed it did not stand up to serious scrutiny.

One of Mr Prescott's Ministers admitted last night that the Government still had not worked out the 'detail' of how the proposal would work.

It was the big idea in Mr Prescott's speech to the conference yesterday afternoon, in which he criticised the way young people were being priced out of the housing market.

'Last year, the number of first-time buyers fell by 27% - a record fall in a single year,' he told delegates.

'Most can't get a mortgage. And many of those priced out of the market work in our public services.

'We need these people. They are essential to a sustainable community.'

The average price paid by first-time buyers in London was £218,000 - three times more than they would have paid when Labour came to power.

Under Mr Prescott's plans, Ministers will identify surplus public sector land and sign a deal with property developers to build on it. These homes would then be offered to first-time buyers, though only certain people will qualify - for instance public sector workers such as nurses or teachers.

'I want them to build high-quality homes at around £60,000 - that's a third of the market price,' he told the conference.

'We own the land. We keep it in trust but lease it for new housing. So the first-time buyer pays the cost of building the house, not the full cost of the land.'

The homes will remain low-cost because when the owner sells he is selling only the building.

'When the owner sells, we keep the land in the name of the people. It's not an asset giveaway - we recycle the subsidy,' said Mr Prescott.

However, the downside for owners is that they when they move they will not make as much money on the sale.

The idea was criticised by Dave Prentis, the leader of Britain's biggest union Unison, which represents hundreds of thousands of low-paid public sector workers.

'This will not help low-paid workers who will never be able to afford a mortgage,' he said. '£60,000 is still way beyond their pocket. What is needed is

more affordable rented housing.'

The Conservatives also poured scorn on the proposal. Shadow local government spokesman Caroline Spelman said the Government had made life much harder for first-time buyers by increasing the numbers who have to pay stamp duty and by dramatically raising council taxes.

Housing Minister Keith Hill conceded last night that the plans were still in their early stages and he could not say when the first homes might be built. He promised the homes would not be built on playing fields. 'We will need to continue to work on this,' he added.

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