HUNDREDS of new homes in Manchester and Salford are being deliberately left empty as speculators try to cash in on rising house prices.

At the same time the number of homeless and those forced to live in cramped and overcrowded temporary accommodation in both cities remains high.

Research found that up to 40 per cent of new flats in central Salford and parts of inner-city Manchester were being left empty despite there being a severe shortage of affordable housing for first-time buyers.

Investors prefer to leave them empty and in pristine condition, ready to sell on, rather than letting to tenants and risking damage to fittings and the need to redecorate. In Salford blocks have sprung up in and around Chapel Street.

Demand

As the demand for space to build new apartments has spread out of booming Manchester city centre, developers have moved just across the River Irwell.

Peter Connor, Salford Council's housing boss, said: "We're still working to establish the number of empty properties across Salford.

"Initial research in the housing market renewal area which covers specific regeneration neighbourhoods in Manchester and Salford does suggest that up to 40 per cent of new-build apartments may be standing empty. While we encourage the development of new housing we are concerned that property investors appear to be holding a lot of these properties empty."

In Salford 3,134 apartments and 1,854 houses have been built in the past five years. But up to March this year planning permission has been given for another 9,526 apartments and 1,716 houses.

Pipeline

Between April and October this year 800 apartments were built and 150 houses, and another 4,000 properties - nearly all flats - were added to the planning permission pipeline. According to council figures there were 630 homeless people in Salford in 2003 and this rose to 1,342 last year. In Manchester the figures for 2004 were 2,751 but dropped to 1,341 for this year.

Joe O'Neil, a Liberal Democrat councillor in Salford, said: "It is a disgraceful and shameful situation that people have no homes, or cannot get a foot on the property ladder, when others are snapping up flats just to make a killing on the property market."

Statistics from the government show that at the end of September this year there were 758 households living in temporary accommodation in Manchester, an increase of 12 per cent on the previous quarter. In Salford the figure was 57.

The research was by the magazine Inside Housing and the 40 per cent figure relates to the Manchester and Salford Pathfinder area - earmarked for regeneration.

This includes Ordsall and Langworthy in Salford, and Harpurhey, Moss Side, Cheetham, Crumpsall, Gorton, Newton Heath, Longsight, Levenshulme and Abbey Hey in Manchester. The highest figure for new flats being left empty was Leeds - 50 per cent. London was 10 to 15 per cent.

A spokeswoman for Urban Splash - a high-profile developer in the Pathfinder area after their still-to-be-completed "upside-down" houses sold out within 48 hours - said more than half had been snapped up by first-time buyers. "The others were not major investors," she said.