Cameron was speaking during a visit to Merseyside where swathes of terraced homes, including those in the Edge Lane area of Liverpool (AJ 16/2/06), are due to be demolished as part of the deputy prime minister's contentious Pathfinder Programme.
The Tory leader's remarks will be welcomed by a growing number of conservations and local resident groups which are vehemently opposed to plans to flatten 400,000 buildings under the government's Housing Market Renewal Initiative.
Cameron said: 'There is no snap judgement here, but it is quite baffling.
'[Pathfinder] is very inflexible, planning to destroy even though those houses are now going up in value.'
He added: 'The government needs to seriously stop and think about where it could refurbish and where it should demolish.
'It is quite inflexible, expensive and unpopular with local people.'
Cameron was joined on his tour by Michael Heseltine, who has recently been appointed to lead a new Cities Task Force in a bid to dispel the Tories' image as the 'party of the leafy suburbs'.
The former deputy prime minister said: 'Instead of areas from which a large number of people are trying to get out because the schools aren't good enough, because the housing isn't good enough, we have to make them competitive with those leafy suburbs to which people go.'