The 'Nano Home'

First it launched the Tata Nano – the world’s cheapest car. Now, the company that owns Jaguar Land Rover and Corus Steel is giving India the world’s cheapest home.

Dubbed “Nano homes” by the Indian media, Tata’s housing project will sell one-room, 283 sq ft flats, less than half the size of a squash court, for 390,000 rupees (£5,200) on the outskirts of Mumbai – a city where property prices compete with those in London or New York.

A more expensive option, for 670,000 rupees (£9,000) is 465 sq ft and has a living room and separate bedroom. The cheaper property costs just 1,378 rupees, or £18.50, per square foot, thought to be the cheapest urban real estate in the world. Like the £1,300 Tata Nano car, the homes are aimed at Indian families who could not normally afford to get onto the property ladder.

Millions of slum-dwellers are expected to jump at the chance to own a home in a proper building.

“This is a huge opportunity to serve those at the bottom of the pyramid,” Brotin Banerjee, CEO of Tata Housing, said. “Our inspiration is the millions of Indians who cannot afford proper housing and live in shanties.” Tata Housing expects a turnover of 1,000,000,000 rupees, £13.4 million, in the first phase.

“Parents don’t want their children to grow up in unhygienic shanties. It is the dream of anyone in the world to own their own house and that is what we are offering – brand new homes in clean, hygienic, well-built buildings,” Mr Banerjee continued.

The first complex of 1,000 homes is under construction in a town called Boisar, 60 miles from Mumbai. It will include a hospital, school, playground and gardens.

By the end of 2009, Tata Housing plans similar projects in Delhi and Bangalore. The group may eventually expand the model to Europe or the US.