The government yesterday revived plans to offer first-time buyers the chance to buy a share in their home as a first step onto the housing ladder.

But while generally praising the initiative, industry specialists say the plan is flawed and does not address some of the most basic issues.

Deputy Prime Minister John Prescott said up to 300,000 council and housing association tenants would be given the chance to buy a share in their home. A further 80,000 families would be helped to get a foot on the property ladder by 2010.

Private developers or housing associations could build the homes and the purchasers would buy the house, but not the freehold, significantly reducing the overall cost. Social landlords would have first refusal to buy back the home if the owner moves on to the private sector.

Surplus government land will be used to build around 15,000 cheap starter homes and Mr Prescott announced a competition to get house builders to construct well designed, environmentally efficient homes for £60,000 without sacrificing safety or quality.

But will it help those on average incomes?

The Royal Institution of Chartered Surveyors (RICS) is pleased that the government has moved away from granting a simple Right-to-Buy to housing association tenants, according to RICS Director of Policy, Michael Chambers.

But, RISC said, the social housing sector had been in rapid decline for years as a result of the sell-off of much of its best stock and the provision of little new replacement housing. Unless the government invests more in social housing we will see continuing social polarisation with consequences such as social exclusion, high crime rates and anti-social behaviour.

The policy is also unlikely to solve the main problem, which is that many people on average incomes remain unable to get on the property ladder as a result of house price inflation.

RICS would like to see more help for first-time buyers and in particular a commitment to review the stamp duty threshold, which is currently £60,000.

Estate agents agree with this sentiment. Peter Bolton King, chief executive of the National Association of Estate Agents (NAEA) said: “Although today’s publication contains many initiatives designed to help more people get on the property ladder, the government is missing one of the most basic steps they could have taken which would immediately help thousands of homebuyers – overhauling the archaic stamp duty system."

“The power to help thousands more potential first time buyers lies once again in the hands of a government shy to reduce what is rapidly becoming a tax on moving house.”

David Bexon, chief executive of SmartNewHomes.com said: “The government has gone some way to alleviating many of the problems that are making property increasingly unaffordable for first time buyers and others in this country."

"However a core problem is the imbalance between supply and demand and this still needs to be addressed to ensure the success of these initiatives."

“There are immediate measures the government could take to alleviate the plight of first-time buyers. Stamp duty on house purchases becomes a burden too far for some youngsters, and we support the call for the threshold to be significantly raised in the next Budget."

“And if the government is serious about tackling the housing shortage, it will have to do more than set up quangos like the Planning Advisory Service announced last December. Its aims are very worthy, but what the industry needs is a strong lead to inspire planning authorities to process applications faster and more constructively.”

Homes just can't be built for £60,000

RICS welcomes the idea of using government-owned land for affordable housing, but is sceptical about the practicality of building houses for sale at £60,000.

It is not only a question of putting up cheap houses, but it is also necessary to create all the supporting infrastructure without which new communities will be unsustainable.

According to Joe Martin, Executive Director of the BCIS (Building Costing Information Service), in addition to the cost of building a house, there is also the 'site infrastructure' and 'site development' costs that must be considered. "BCIS projects that a house actually built for around £60,000 would most likely have to be sold for at least £110,000 (excluding land) once the cost of the site infrastructure and the cost of developing a site are both taken into account."

BCIS calculate that if a house is to actually have a sales price of £60,000, it will have to be built for less than £33,000. The government's proposal to build starter homes for only £60,000 is therefore unrealistic according to RICS.