Elegran yes they could build around privately-owned houses on estates - not likely to be practical/financially viable though as I doubt if there are any detached houses on 'sink' estates. Also, many of the flats in high-rises are privately-owned; the government would have to buy-out the owners and such flats in inner London go for around £500,000. The money set aside for these refurbishments is not going to go very far.
I don't think it's been announced which estates are in the plan but there's been mention of a couple of London estates; the ones I've heard are in prime inner areas. I really hope that if this plan goes ahead that the majority of tenants will return but I honestly can't understand how it's all going to work - where will they live in the meantime?
Lots of estates are refurbished without the tenants having to move out - there's no need for demolition. I don't think anyone is against improving peoples living conditions just questioning how it can be done on the very limited budget that's been mentioned - £150 million?
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But it is still true that you misread the post where you thought I was approving putting people into ghettos.