GMCA bids to extend £1.2bn housing loan fund
Having supported the delivery of 10,000 homes across the city region, the fund is due to come to an end next March.
To date, just shy of £1.2bn of loans have been approved from the Greater Manchester Housing Investment Loans Fund.
This cash has been lent to developers to support housing projects ranging from four to 1,500 units across the city region’s 10 boroughs.
Unsurprisingly, Manchester has seen the highest number of homes committed to be delivered through the fund – 6,291. Wigan has benefitted least, with loans awarded resulting in the delivery of just 25 homes so far, according to GMCA.
The 10-year fund will conclude next March. There will be a three-year run-off period but no new investments will be made during that time.
GMCA will ask the government to extend the fund beyond that date at the next spending review. If that request is turned down, the GMCA will be required to pay the loan back to the government by March 2028.
The fund started in 2015 after the government provided the GMCA with £300m to invest in speeding up the delivery of homes. Over time, the pot has quadrupled to £1.2bn thanks to interest on repayments.
The fund has been successful in boosting the delivery of housing across the 10 GM boroughs and plugging viability gaps that often arise with brownfield development.
A report to the GMCA’s scrutiny committee states that fund “has not lost any money…[and] while extensions to the payment terms of the loans have been agreed with borrowers, no enforcement action to recover outstanding loans has been taken to date”.
“Where repayment terms have been extended, interest has continued to accrue and be payable to GMCA,” the report adds.
The combined authority is currently facing a legal challenge in relation to the fund. Weis Group, a Manchester-based landowner claims the loans to developer Renaker and related companies have “distorted” Manchester’s property market.
GMCA has maintained it is “confident in its processes”.
The cost per home is completely ridiculous because of the insistence of building many of them in Manchester where land prices are the highest That’s great for landowners but not people who just want a home
By Tracey Shaw
Surely a Labour government wouldn’t allow this
By Anonymous
I know GMCA never really sees much point in accountability, but given the pressures now on wider public finances, and the demands of the newer CAs with more challenging local economies, they might have already better made the case for why a pot of money this size is needed be left with them to support mostly schemes in Manchester, built by developers with decent track records who should be able to access private funding, particularly given they’ve always insisted the money is lent at commercial rates and in no way a subsidy.
Support from the Property Fund doesn’t particularly seem to be helping schemes of marginal viability, on troublesome sites, contributing to wider regeneration that wouldn’t happen anyway, or helping developers to meet affordable housing requirements.
Providing the £1.2 billion stays in GM, it could pay for a new North Manchester Hospital, or some useful infrastructure, both of which would also generate construction jobs and professional fees for the sector.
By Flush Sund
Glad the GMCA are confident in knocking back the Weis Group fishing expedition.
On the bigger picture – great news that the GMCA want to extend the Fund – it has been a key instrument in driving parts of the GM housing market forwards, helping unlock both high density and low rise development across the city region.
By Anonymous
Would GMCA be required to pay back the original £300m or the £1.2bn it’s grown to?
By Anonymous
Hi Anonymous. My understanding is that all of it would go back. Cheers, Dan
By Dan Whelan
I was under the impression GMCA are being investigated for offering loans to favourable confederates?
By Anonymous
Hi Anonymous, as the article states, a Manchester-based landowner has launched a legal challenge against the GMCA over loans granted to Renaker.
By Dan Whelan
So in effect it’s a Manchester fund? Not a Greater Manchester fund? I appreciate more young professionals, want to live in Central Manchester than Kearsley but if it is to support housing quotients everywhere, then it needs to be made into two funds. One for Central Manchester and Salford, and one for the rest.
By Elephant
Super interesting debate, if it ain’t broke don’t fix it vs new CA’s could probably use a similar facility. Maybe the best solution is for GMCA to keep some and hand some back to go to WYCA, LCR and SYMCA.
By Rich X
I think the real issue here as PFE taught us is that the other districts really aren’t that committed to building new homes…………the housing targets in Manchester and Salford are disproportionately high. The money comes to Manchester and Salford because that is where the homes are being built!!!
By Big red