They were trumpeted as being affordable homes for key workers. But, asks Kristina Smith, will the people they were designed for ever be able to buy them?

For two weeks last month architects, members of the public and lots of foreign students flocked to Store Street in London to view a £60,000 house.

"I can't believe what you get for £60K," wrote one excited Dutch visitor on a comment card pinned to a board in the Design for Manufacture exhibition. He even left his email address with instructions to forward him details of where the first houses were going to be built.

It is a lovely house: two storeys, two bedrooms and a funky lantern thing on top which lets light and heat in and helps with ventilation at night. And what a great location, right outside the Building Centre, just off London's Tottenham Court Road. Shame it had to be knocked down after the event.

But our Dutch friend, and probably many others, are going to be disappointed. Because no one anywhere will be able to buy this, or any of the eight other winning houses for £60K. "The £60,000 has always just been the target construction costs," an English Partnerships spokesperson explains patiently. "It's never been the total sale price."

Hang on. Didn't John Prescott tell a Labour Party conference in 2004 that key workers would be able to buy houses for £60K? Something about an innovative scheme where the government would retain ownership of the land and the buyers would just pay for construction costs?

Well, that is long forgotten. The developers own the sites now. That was all part of the Design for Manufacture Competition, which the ex-ODPM launched in April last year. As well as their designs and ideas, the nine winning housebuilders submitted bids to buy one or more of the 10 English Partnership sites. Key workers might be able to get half a house for £60,000 under a shared equity scheme, but only if the market value for two-bedroom houses in that area is £120,000.

Keeping costs down

Right. So it is the construction cost which is £60K. Was it tough to get the construction cost down to £60K, I ask Nick Davies, who is design and planning director for Crest Nicholson's south east region. Crest is the lead member of the consortium which got to build its house outside the exhibition.

He replies: "It's not just about what we are doing now. It's about looking forward to efficiencies of offsite and achieving volume and repetition." I'm not sure if this is a yes or a no. "The £60,000 has been taken out of proportion," suggests Jeff Tomlinson, Kingspan Century's national sales manager for Kingspan TEK, another member of the consortium. "There were other requirements. The house had to be energy efficient and innovative." It is not difficult to build a two-bedroom house this size for £60,000, he explains later, but it is an achievement to incorporate the "wizardry and gadgetry" (maybe he means the lantern).

No one really wants to talk about the £60k thing. I bet Crest Nicholson and its partners are cursing the bright spark who thought up the name SixtyK for their consortium then.

I ask what Crest Nicholson got out of this whole process. Davies is surer on this response: two sites to develop. SixtyK will be building homes on the Linton Hospital site in Maidstone and Renny Lodge, Newport Pagnall. The other successful bidders are William Verry which won sites at School Road in Hastings and a former TA site in Aylesbury Vale; The Countryside Consortium, which won Horns Cross; Westbury Homes on Park Prewett Hospital, Basingstoke; Barratt Developments on Allerton Bywater near Leeds and Upton, Northampton; and George Wimpey at Oxley Park, Milton Keynes. Three ‘winning' designs missed out.

That is a lot of housing for key workers and first time buyers. Well, no it isn't actually. About 33% of the total of homes built on all the sites will be either for rent or shared ownership, the percentage varying depending on the local authority. And that 33% won't necessarily all be starter homes. Some 30% of the housing on each site will be the £60,000 variety, the remainder being other sizes but built to a similar design and efficiencies.

It does not appear that this competition will mean more houses for those who can't afford them at the moment. Davies makes the point that if using modern methods of construction lowers costs in the medium-term and makes brownfield sites more attractive, there will be more land to develop. But won't that just mean that brownfield sites cost more? There's such a shortage of land.

One thing the Design for Manufacture competition has achieved so far is publicity. Which is no bad thing. It is great to see people buzzing round the Building Centre and talking about housing design. I even saw the SixtyK house on the telly.