'Robin Hood' offers cut-price flats for young

A Spanish property developer has been cast as an unlikely Robin Hood for his plan to sell thousands of flats to youngsters and divorced people at cost price. Since Jose Merino announced he would allocate 2,000 cheap homes tomorrow to those who applied on a first come, first served basis, an impromptu campsite has sprung up in Fuenlabrada, south of Madrid, of those who hope to exchange chilly canvas for four walls.

The kilometre-long tent city reveals the deep desire among Spaniards to own their home, even in these credit crunch days when getting – still less paying for – a mortgage is a mighty challenge. Flats and houses soared to exorbitant heights during the recent property and credit boom. Now the bubble has burst, and sales are paralysed, but prices are falling only slowly as vendors prefer to hold on rather than sell cheap. Property is still largely out of reach for the young or separated, but Spain remains a country where renting is seen as tantamount to throwing money down the drain.

But the frenzy in Fuenlabrada seems something of a dream. Mr Merino's houses are not built yet. He does not even have the plots on which to build. "For the moment, there's no building land," he admits. "There are various options with other developers to buy land around Toledo, or in some town or other south of Madrid."

He plans to build 2,100 flats of between 70 and 90 square metres, which would cost between €120,000 (£103,000) and €168,000 (£145,000) each, prices not very different from flats already on offer in Fuenlabrada. Tomorrow at 10am, he will start to sign up members of a future co-operative, who must each contribute €120 euros to a management fund, then wait. Only those between 18 and 35, or who are divorced singles with no home of their own, may apply.

Mr Moreno's philanthropic initiative has caused a furore in the little town, which has opened the lavatories and washrooms of the local football stadium to the thousands camped along the main street. For, unlike many in a discredited profession, Mr Moreno has a good reputation. "He is from Fuenlabrada and has done good things, built houses at good prices," says Francisco Romero, in the tent city. Raquel Sanchez, enduring the cold with her daughters Arancha, 31 and Magdalena, 24, says: "In his last development there was money left over, so he put air-conditioning in all the flats."

Fuenlabrada's socialist mayor, Manuel Robles, warned: "Don't build up false hopes, because Jose Moreno hasn't land on which to build." Allocation of land for subsidised housing is done by public tender, he added.