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Prescott's £60k home will cost £95k

Promoter admits price of Prescott's flagship cheap house, launched in Manchester last week, will bust the £60,000 budget

THE GOVERNMENT'S flagship £60,000 home, being touted as the future of cheap housing, will really cost £95,000 to build.

The show home, modelled as a three-storey town house, took centre stage at last week's Delivering Sustainable Communities Summit in Manchester.

Around 2,000 developers, council planners and urban regeneration specialists attended the event to see the next generation of affordable starter homes.

Speaking at the event, a triumphant Mr Prescott challenged his critics, saying: 'People are fascinated by the £60,000 house.The home will be taken to Allerton Biwater near Leeds, where it will become a £60,000 house for a family.'

He added that prefabricated builders could build homes even more cheaply than the Government's price challenge.

Mr Prescott, who had toured off-site manufacturer's stands earlier, said: 'Prices are falling even in the exhibition hall.'

But a spokeswoman for regeneration body English Partnerships, which is promoting the Fusion steel-framed pod system, admitted the house would cost £95,000 to build.

She added: 'A two-storey house made from four basic pods would cost £60,000, though.'

Rival off-site accommodation specialist Rollalong claimed it had pegged costs to £41,000 for a twoperson starter home.

Will Jones, marketing manager, said: 'We had Mr Prescott on our stand and he was very impressed with what can be achieved.'

The Government will advertise in the Official Journal next month for bids to build a demonstration affordable housing scheme of 1,000 homes.

But mortgage lenders remain cautious about providing loans.

A spokeswoman for the Council of Mortgage Lenders said: 'Mortgage lenders have had their fingers burnt by untried construction methods in the past, so there is naturally going to be some caution.

'But we have worked hard with the BRE to draw up a protocol that would avoid a mortgage blight in future.'