Pathfinders face up to house price claim

The housing market renewal (HMR) pathfinders will meet communities secretary Hazel Blears next week amid fears that they are being threatened by rising house prices.

The pathfinder heads have urged the government to continue funding for the £1.2 billion initiative in the next spending review.

But the programme has continued to attract controversy. It is feared that property speculation in areas earmarked for demolition is resulting in large payouts.

A report commissioned by the pathfinders this week confirms that speculative purchasing by investors is having an impact and has cost around £50 million.

The research says significant house price growth has brought increased private investment but warns that this has caused serious affordability problems.

It also finds that increased confidence in the areas as a result of the programme has made homes less affordable for people on low incomes. Although house prices doubled between 2002 and 2006 average incomes increased by just a quarter, it notes.

In addition, HMR areas are only increasing in population in the 15 to 29 age group and are losing affluent families, the figures show.

The report finds that between 2001 and 2004, the Tees Valley suffered the greatest decline in population at 2.5 per cent. Only Manchester and Salford and Birmingham and Sandwell have showed significant population growth, it says.

Bridging NewcastleGateshead chairman Jim Coulter argued: "Populations are not leaving in droves as before but becoming more stable."

"The most important element is that there are new-build projects over the next three-year period. This will help raise supply, balance prices and provide more choice," he added.

Acting chief executive for Gateway Janet Whipps said: "House prices are still very affordable for people looking to buy, with Hull remaining one of the cheapest places in the country."

The report is available at

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