First-time buyers are to be offered homes for £60,000 under government plans announced yesterday.

The deputy prime minister, John Prescott, also said an estimated 300,000 families in housing association or council property will be allowed to buy a minimum stake of 50 per cent in their homes.

Furthermore, up to 80,000 first-time buyers will be helped by the construction of low-cost starter homes on public land.

But the Conservatives said the government had allowed problems in the housing market to "spiral out of control".

The party's local government spokesman, Caroline Spelman, added that the problems were "largely of the government's own making".