by Daily Mail Reporter

Cost explosion sends ‘cheap homes’ up 60%

Soaring costs are wrecking a scheme for council tenants to buy new homes at rock bottom prices with 100% mortgages.

Earlier this year tenants as Bodmin, Cornwall, were told that semi=-detached houses were to be built by a Torquay firm, could be theirs for £3,350.

But now the shock – prices will be at least £5,250 for the first 20 homes , and probably a great deal more for the other 42 planned.

When the idea was first proposed the council agreed to sell the plots to the builder at only £70 each. Twenty applicants quickly signed contracts. But these contained escalation clauses.

Now Mr Wilfrid Broomfield, 67, who controls the building company – Statham – with his wife, has announced a massive price increase with only the foundations for the first three houses laid.

He said “The way costs have gone in the last few months, if we were to sell now at even £3,750 we would be losing at least £1000 on each of these 20 houses. Unless the people who want to buy can go ahead at my new price, then I can’t build at all. And there is no doubt that the remaining 42 would have to be a great deal more.

Mr Ivor Whitling, Bodmin Town Clerk, said ” The whole scheme was designed to allow people to buy houses who could otherwise not afford it.”

“Where this now puts council tenants who would have had to have had 100% mortgages on the original price, I just don’t know. Obviously most of them just can’t afford to go on and those council houses which we had hoped to be able to let as a result to people on our long list will just remain occupied.”