Institute of Public Policy Research says money would be better spent on regenerating suburbs

New Labour’s favourite think tank has warned ministers that the city-centre residential boom is unlikely to benefit decaying parts of the inner city, and that regeneration money should be aimed at improving suburbs.

A report published this week by the Institute for Public Policy Research says interviews with those who have recently moved to Manchester, Liverpool and Dundee show that they avoided the decaying areas lined up for help under the housing market renewal initiative.

The report said: “The majority are not interested in moving to housing market renewal areas at present. For people to move, the areas need to be safe and have good quality housing stock, a sense of functioning community and be in, or close to, desirable areas.

“Very few HMR areas are perceived to offer this. That suggests that price rises in these areas are driven more by speculative and investor activity than actual moves. Renewal programmes should focus on improving suburban communities, rather than extending city centres.”

The IPPR added that city-centre regeneration was unlikely to spill over into “inner ring” districts, although it said such areas provided scope for family-friendly housing.

IPPR fellow Max Nathan, who wrote the report, said pathfinders needed to “pick the bits that are working” and improve them, rather than concentrating exclusively on transforming the worst areas.

The report also noted that the growing market for city-centre living would continue to be dominated by young single people and couples rather than families.

It said: “It is unlikely that continental-style city living will fully take hold in Britain. Family-friendly city centres should not be a priority.”

Adam Wilkinson, director of Save Britain’s Heritage, which has been campaigning against market renewal, said: “It would be better to spend money improving existing housing.”