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Last Updated: Sunday, 15 October 2006, 17:03 GMT 18:03 UK
Key worker housing under scrutiny
Estate agent's window in Richmond, London
Housing for key workers in some areas is becoming too pricey to buy
Subsidised flats meant for nurses and teachers in London are ending up in the hands of well-paid professionals and top executives, the BBC has discovered.

An investigation by the BBC's Five Live Report centred on Chelsea Bridge Wharf by the River Thames, where a two-bed luxury flat costs more than 500,000.

It found that 40% of the subsidised flats had been sold to people who were not key workers.

A probe by the UK government has found this was a problem nationwide.

According to the government's own evaluation of shared ownership schemes, one in three properties have gone to someone who could afford to buy the home on the open market.

In the north of England, 80% of those people living in shared ownership properties could afford to buy their own home, the government said.

'Designer wear'

The problems have surfaced at a time when government is trying to find ways of helping key workers buy houses in areas where prices have surged.

The Housing Corporation receives almost 1bn to support shared ownership schemes mainly in the South East.

No misallocation or mis-use of public housing subsidy has taken place
Housing Corporation statement

In London, the Chelsea Bridge scheme is run by the Threshold Housing Association, which received 2.2m in funding from the Housing Corporation.

As a result, one block of the riverside development was set aside for key workers, but when the BBC checked the list of residents included several accountants, a bank manager and a buyer at Harrods.

In the penthouse top floor flats were an orthodontist , a housing association worker and a financial controller for a FTSE 250-listed company.

Jessica Hardy is a 34-year-old teacher from Battersea who also lives in the block and who says she has long suspected that many of the apartments have not gone to key workers.

"I do bump into people in the lift who are dripping with designer wear and I think I'm sure you're not even a head teacher," Ms Hardy told the BBC. "They don't look like doctors and teachers to me."

'Meeting the criteria'

Threshold Housing said that on this particular scheme they used their own definition of a key worker.

They explained that while some people did not qualify as key workers, some others, including the Harrods staff, would be eligible because of the levels of their salaries.

I would want to know it was satisfied that 2m of public subsidy had been well used
Dr Phyliss Starkey MP

Dr Phyliss Starkey MP called for the Housing Association to investigate how its 2.2m grant to Threshold to subsidise rents at Chelsea Bridge Wharf was spent.

"I would be interested in the Housing Corporation having a look at the detail of this housing development," she said. "I would want to know it was satisfied that 2m of public subsidy had been well used."

The Housing Corporation said all the homes in question it funded were allocated to people meeting the government's eligibility criteria for affordable housing, in this scheme encompassing those on low incomes, first time buyers and key workers.

"No misallocation or mis-use of public housing subsidy has taken place," the organisation said in a statement.

Simon Cox's report can be heard on Radio Five Live on Sunday 15 October at 1930

Radio 5 Live investigation into shared ownership schemes

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