Housing market renewal managers have volunteered to redraw some of the areas covered by the initiative in response to rising house prices. Opponents of demolition have argued that this has made the policy redundant in many districts.

The offer, contained in submission to the Treasury’s Comprehensive Spending Review, is being put forward as part of a wider package to safeguard the initiative’s long-term funding.

The proposal was put together by consultant Ecotec on behalf of the chairs of the nine pathfinder areas.

It says: “The pathfinders should be prepared to work with government to assess whether the original boundaries of the market renewal areas are still robust enough given changing market conditions, or whether they need to be reassessed ...

“Any change of boundaries will need to honour existing financial commitments, but given the nature of the programme a major mid-term review of the intervention areas would appear to be appropriate.”

The report says the review should be concluded by 2010 when the entire programme to revive England’s housing blackspots has reached its midway point.

It says house prices have risen in the pathfinder areas since the initiative’s launch in 2003, but at a slower rate than across the nation as a whole.

The report says it remains an “open question” whether these recent houses price rises are sustainable, that long-term “voids” (vacant homes) are “still significantly higher” than the national average and that older people and couples are continuing to move out of the pathfinder areas.

The report calls on the government to extend the pathfinders’ two-year funding programmes and says the nine projects will work with English Partnerships and the Housing Corporation to provide affordable housing for low-income residents whose homes have been demolished.

Brendan Nevin, the report’s author and the director of Ecotec, said: “The chairs want flexibility over the use of resources and a long-term commitment. In return they are willing to be flexible over boundaries, which are very widely drawn.”

Duncan Sutherland, the chief executive of regeneration developer Inpartnerships, said: “In some areas they will have to rejig boundaries because house prices are going up and there’s a market being created.”

What’s happening now

  • £550m of public money invested
  • £27.5m of private investment
  • 300 homes constructed
  • 8,000 dwellings demolished
  • 30,500 homes refurbished

What’s happening in the next two years

  • £681m of public money will be invested
  • 2,700 homes will be built
  • 4,800 dwellings to be demolished
  • 12,200 homes will be refurbished