Residents of Saltwell and Bensham were promised £750 million of investment from the private sector following the demolition of 440 homes in the area. This money would come from Gateshead Council's private sector partners.
The talk of "private sector partners" is naive at best showing a lack of understanding about the private sector. The private sector are not risk takers but conservative investors seeking to maximise profit. When real risk of expense arrives they run for cover.
Right now Inside Housing is just one of the places reporting the retreat of private sector investment. Gordon Brown has breakfast with bankers who dont even trust each other to lend cash and over £50 billion of public funds is now committed to buy up the dodgy mortgages bought by the banking industry.
One of Britains largest builders, Persimmon, is persponing key projects because of lack of buyers. Sales have dropped 24% and Citizens Advice Bureaux are estimating that repossessions will reach 53,000 this year. So we will have an increase in need to rent just at a time when Gateshead Council are demolishing homes for rent.
So where does this leave the £750 million of investment. At best it leaves private sector investment as a distant hope and at worst it means that demolition is proven as the wrong policy in the wrong place at the wrong time.
Links
Inside Housing
The Guardian
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