The government has given its strongest pledge yet that it plans to put huge new investment into areas of low housing demand.
Seed corn funding to cover start-up costs for the nine housing market renewal pathfinders could be announced as early as this week.

The nine hope the government will take the opportunity of a debate on the Commons select committee report on empty homes today (Thursday) to pledge several million pounds.

Civil servants first mooted the move last year using the same model as the New Deal for Communities. It would allow pathfinder partnerships to form specialist teams to draw up plans.

Responding to the committee report (Housing Today, 21 March), the Department of Transport, Local Government and the Regions pledged a “step change” in its approach.

It said: “We are looking at options for more drastic action than ever before in failing housing markets - and action on a larger scale.”

It insisted that it would hit its tough target of not just arresting the spread of low demand by 2010, but reducing it.

The select committee had warned that current measures would not be sufficient.

The department said the comprehensive spending review in July would consider measures to help not only the pathfinders but also other areas in danger of collapse.

It said: “The government readily acknowledges that there is a need not just to seek to turn around places already experiencing low demand housing (be it small or large scale), but to seek to prevent low demand in the first place.”

The department is concerned however that many councils lack accurate data on which areas are at risk, and wants to see concrete plans in place before releasing cash.

Chartered Institute of Housing policy director John Perry said that if the government met the estimated £500m annual cost of the market renewal fund, housing would be among the government’s most favoured spending areas.

“Spending from 2001 to 2003 is already up by £1bn, equal to at least a 10 per cent annual increase when most other departments are rising at 3 per cent,” he said. “Adding another £1bn by 2006 would be a huge further increase – but even that will not go very far in addressing the scale of the task.”