Ministers to rethink homes demolition plan

The government has admitted that a programme to demolish thousands of houses in the north of England will need to be reviewed after it was revealed that house prices in the areas targeted have more than doubled. In response to a select committee's concerns about the controversial housing market renewal initiative, the government has suggested that it wants to scale back the number of homes bulldozed under the scheme. It said that those running the programme in nine "pathfinder" areas of the north and Midlands would have to take account of changing market conditions. The response revealed that since the programme started in 2002, average house prices at the cheaper end of the market in those areas has risen from £22,000 to £49,000 - an increase of 122%. The figures question the rationale of a programme that is designed to tackle failing housing markets through a mixture of demolition, replacement and repair.

The response said: "We expect pathfinders to be able to respond to the changing market. We will examine critically the proposed balance between refurbishment, new build and demolition." The government also said that changes to the housing market was one of the reasons why it would not commit long-term funding to the initiative. But the government still expects some demolition to take place. "In some areas, the only option for providing a mix of housing meeting present day expectations is to replace less desirable homes with new ones," it said. In a sentence that will alarm conservation organisation it added: "Pathfinders should look at all options for refurbishments, but they also need to recognise that in some areas refurbishment has been tried many times before, often at very significant cost, but it has not solved the problem of low demand."

The document was released unannounced on the Office of the Deputy Prime Minister's website last Thursday. It was the government's formal response to a critical review of the programme by the urban affairs select committee published in March. The MPs' criticism reflects growing concern about the programme. Earlier this month the government was forced to hold a two-day meeting with residents and conservation groups alarmed at the scale of demolition being contemplated. In February public spending watchdog the Audit Commission also queried the purpose of the programme after discovering that house prices were rising at a faster rate in the north of England than in the south. "Policy makers and practitioners need to ask themselves, would recovery in the pathfinder areas happen anyway, even without intervention?" it asked.