Lofty idyll of urban living

Every week, hordes of people quit the city for a more rural life. Now the government has unveiled plans for an "urban renaissance". But inner-city living remains an expensive proposition.

Walking through city centres across the UK, one might be forgiven for thinking an urban renaissance was already underway.

Dilapidated warehouses, office blocks and factories are being gutted and converted into trendy loft-style homes.

There goes the neighbourhood

However, is this the type of "brownfield" regeneration the government is hoping to encourage with its latest White Paper?

With a predicted four million extra homes required by 2020, recycling the nation's 1.3 million empty buildings is seen as a more attractive option than to concrete over green fields.

But it seems much of this redevelopment is aimed at the well-to-do.

Value added tax is still collected on renovated properties - though a lower level will soon be levied - whereas new buildings on fresh sites escape the duty.

Charity begins at home

This tax disincentive, along with high building costs, has encouraged developers to concentrate on the high end of the housing market.

"Builders will not put money into something which they won't make a profit from. Not that there's anything wrong with that, but they need incentives to build homes for those on lower incomes," one experienced urban architect told BBC News Online.

'Any offers? Plenty of cupboard space'

In Leeds, apartments in a converted warehouse are on sale for £200,000 - four times the price of a regular flat in the city. In Newcastle Upon Tyne you'd need as much as £300,000 to move into a flat in the redeveloped central post office.

Sir Terence Conran, design guru and a long-time advocate of urban regeneration, decries such high prices.

"It is appalling that young people cannot afford to live in London and in cities generally. Spiralling house prices are no way to encourage people to live and work in our cities and revitalise them."

High rise prices

However, the loft-style apartments Sir Terence is helping to develop with firm City Lofts are not within everyone's means. A two-bedroom penthouse in Manchester could leave you with little change from £420,000.

This is not the most expensive renovation in Manchester - a city which has lost a third of its urban residents since 1961. A cool million will get you two-bedrooms in the Capital Building - a development comprising a listed Edwardian building and a 1960s office block.

'I love what you've done with the kitchen'

Despite once being described as a "a running sore", Keeling House, in London's Bethnal Green, had been transformed from a blighted public block into a luxury des res.

Seven years ago, council tenants were moved out because the structure was deemed unsafe. Now it would cost as much as £375,000 to move into one of its penthouses.

MP Andrew Bennett, chairman of the Environment Sub Committee, thinks a one-sided urban regeneration is not regeneration at all.

Paying the price

"Urban regeneration, if it is to succeed, must be about recreating balanced communities - a local community where some will be well paid, and others on more modest incomes."

One urban architect told BBC News Online excluding lower income residents is as hazardous to "sustainable development" as the flight of the rich to the suburbs.

"There are urban developments, but often poorer people don't share in the benefits."

Will service workers be squeezed out?

Nowhere are the dangers of going high-rent illustrated more graphically than in America's so-called Silicon Valley.

The area, to the south of the San Francisco bay, is the hub of the world's internet industry. Dot.com millionaires have brought with them a property boom - pushing the price of even a modest home to an eye-watering $600,000.

Shops have closed down as rents have rocketed, prompting local officials to call a temporary halt to leases for internet companies.

While even software whizkids are finding house hunting a struggle, the service workers who keep the internet firms ticking are the real losers.

Despite a flood of new economy cash, the region boasts 7,000 homeless people with full-time jobs.