EFFORTS to help people on to the property ladder by allowing them to buy a share in a house are being scuppered by banks refusing to lend to them.

Westcountry councils report homes built for Shared Ownership Schemes have been left empty or rented out, despite growing demand from local people.

Housing waiting lists in the region have more than doubled in the last decade and, despite the recession seeing a drop in property prices, houses still cost up to 16 times the average salary in parts of the region.

The Commission for Rural Communities reported that securing a mortgage for shared ownership schemes was "increasingly difficult, if not impossible". It said that, in the village of Polruan in South East Cornwall, a development of 15 low-cost homes has been achieved "after years of work".

But the shared ownership homes were left "unsellable" because it had been "impossible" for applicants to obtain mortgages.

Similarly, in West Devon, 25 affordable homes due to be sold on Shared Ownership leases had to be converted into social rented units.

Dartmoor National Park Authority built three shared-ownership homes for local people but none of the interested families could get a mortgage.

Privately, council officials claim lenders are "not trying very hard" to support the schemes, instead concentrating on the "easy hits" like buyers with big deposits.

Housing minister John Healey told the Western Morning News: "Although lending is beginning to ease a bit, the demands for large deposits still make homes unaffordable for a lot of people who could afford the mortgage but can't afford the deposit."

He sits alongside city minister Lord Myners of Truro on the Home Finance Forum to "pull together senior people from the major lenders and the consumer groups" to try to get lending moving again. "I think we will see lending become more available but it will recover quite slowly," he said.

The Commission for Rural Communities said: "Development of affordable housing through Shared Ownership properties is proving difficult – driven by both credit constraints for developers and potential buyers.

"These conditions are vital for retaining social housing within rural areas, but at a national level only two or three lenders for this product now exist and it is increasingly difficult, if not impossible, to find a mortgage for homes that are subject to restricted equity in rural areas."

John Packer, affordable housing champion at West Devon Borough Council, said: "This has happened on a lot of our sites. The local people who want shared ownership generally don't have a great deal of money, so they cannot go in with big deposits.

"Of course we are concerned, because our research shows that people do want, if they can, to access shared ownership, but they are finding it more difficult."

In February this year, as the effects of the recession hit the housing industry hard, it was announced that the Rural Housing Trust was to be shut down.

The charity, which worked to build affordable homes in rural areas, said it could not survive the "prevailing difficult trading conditions".