The Government this week unveiled a pound;1 billion package to help teachers and other key workers buy homes in the capital and other areas where prices are high, predominantly in the South-east.
The Homebuy scheme will replace the Starter Home Initiative (SHI), which ends in March 2004 and which provided teachers with loans of up to pound;20,000.
Under the new package, teachers who move into leadership posts in London schools will be given loans of between pound;50,000 and pound;100,000. A thousand senior staff will benefit from these loans over the next two years.
Other teachers will be able to get interest-free loans of at least 25 per cent of the value of their property, with a limit of pound;50,000.
Teachers will also be able to rent properties from registered landlords at below-market rates.
Charles Clarke, Education Secretary, said that extra support was being provided for leadership staff because of the powerful impact they could have on transforming schools.
The National Union of Teachers said it welcomed the bigger loans but could not understand why the most money was going to staff who were most likely to be on the property ladder already.
Doug McAvoy, NUT general secretary, said teachers often felt uncomfortable about the loans because they tied them to teaching and to living in London.
"It is a golden ball and chain," he said.
More than 11,000 key workers were expected to have benefited from the SHI by now, but only 4,500 have used the scheme. Teachers must repay the loans if they leave the profession or move out of London.