Buy it if you're happy to live there for a few years, but don't expect it to be a financial stepping stone to a bigger property. Unless you really think prices will be higher when you want to move?
If I was trying to sell a flat at the moment I would probably be quite pissed off about having to compete with this scheme.
Could this mean lower asking prices?
I think the difference is that the housing market is unsustainable if only the very wealthy can afford to buy into it. This isn't true for the Lambo market, where it has always been the case that it's only for the very wealthy.