Report shows programme has attracted developers in areas that had been avoided for decades

The government’s £500m housing market renewal programme has sparked interest from developers in areas that have been investment-free zones for decades, according to a report by the pathfinder bodies.

The as-yet unpublished findings cite examples such as Countryside’s investment in Salford and Stoke-on-Trent, and Keepmoat’s investment in Hull.

Mike Gahagan, chair of the South Yorkshire pathfinder, said the study showed they were delivering good value for public money. He said: “An enormous amount is going on in areas that haven’t had private investment for a long time.”

The nine pathfinders carried out the study after Yvette Cooper, the housing minister, asked them to show how they were attracting private money. The chairs of the pathfinders will present their findings to Cooper next month. The National Audit Office is compiling evidence on the same issue.

Pathfinders were designed to revive flagging housing markets in depressed parts of the north of England and the Midlands.

The meeting with Cooper will be the climax of the final round of lobbying by the pathfinders in the run up to Comprehensive Spending Review this summer, when the Treasury is expected to make big cuts to programmes across the government.

The pathfinders are nervous that the communities department, headed by Ruth Kelly, will prioritise new housing in the South-east growth areas.

As part of their attempt to convince ministers that the programme should receive a boost, the pathfinders will

bring hundreds of residents to London on Monday to lobby the House of Commons. Last week, the chairs of the nine pathfinders met John Healy, the Treasury minister.

Recently published communities department research provided a fillip for the pathfinder programme by showing that the proportion of homes sold for less than £50,000 had fallen sharply across most of the pathfinder areas.

The same study showed that the level of vacant housing had fallen from 5.6% in 2001 to 4.8% in 2005.