Houses make 29,000,000% profit

Houses that were sold seven years ago for 50 pence each in a desperate attempt to regenerate an area plagued by high unemployment, crime and antisocial behaviour are now being sold for up to £145,000 each.

The homes in North Benwell, a rundown area of Newcastle upon Tyne, have increased in value by about 29 million per cent compared with the national average of 162 per cent over the same time. When the houses were sold eight years ago by the city council there were more than 250 applicants for each one.

One resident was initially warned off: 'My friends told me not to buy in Benwell - even for 50p. It had a terrible reputation, but we like it. Our neighbour's just sold his house for £145,000. But that doesn't shock me. I'm happy. I bought a house for 50p. Now look what it's worth.'

In 1999, while homeowners in most of the country revelled in record property prices, the market in Benwell had collapsed. Although it is just a mile from the affluence of Newcastle city centre, poverty and despair seeped out of every burnt-out car, broken window and boarded-up home.

Home ownership levels were low, unemployment high and most residents were living on benefits. Kerrie Clarke, a local estate agent, said: 'North Benwell used to be grim. It was all right by day, but by night it was a different story. Good people used to shut their front doors and hope for the best.