Skyscraper loan surplus to fund social housing across Greater Manchester

Cash from city centre skyscraper developments will be used to fund social housing across Greater Manchester as part of an ‘innovative’ new scheme.

Combined authority leaders have approved the plans that also include a fresh crackdown on rogue landlords.

Spearheaded by Salford mayor Paul Dennett, the initiative will see returns on loans handed to developers spent on providing ‘truly affordable’ homes amid the region’s housing crisis.

The GM housing investment fund – launched as part of the region’s devolution deal – has to date been used for market-rate housing, particularly around Manchester city centre.

The plans, signed off at a meeting of the combined authority on Friday, will allocate £350k of surplus cash from the fund ‘to develop affordable housing propositions’, along with a pot to buy out ‘unscrupulous landlords’.

Mayor Dennett said it represents ‘some really innovative work’ that will make ‘great progress’ along with the region’s over-arching housing strategy, scheduled to be unveiled in February.

"Around 92,000 council houses have been sold off under Right to Buy in the region since 1980," he added.

A report tabled for the meeting said 'since 2012/13, there are 13,203 less social rented homes across GM, a loss of over 5%/.

“We also know that a third of the private rented sector in GM is estimated to be non-decent and across GM we currently have over 85,639 households on the housing register, waiting for a council or social home.”

Greater Manchester Mayor Andy Burnham said the ‘exciting’ work provides vindication for the housing fund, which has attracted criticism because of the large sums loaned to upmarket developments in the city centre.

He told colleagues: “I think in the early days, when it was just about big loans to provide apartments, people couldn’t see the full story but it was always about generating a surplus that would be redistributed.

“So as this policy now comes fully to fruition, colleagues can now see it’s about inclusive growth across GM and we can share the value of some of the city centre development and redirect the proceeds that come from that to truly affordable housing but also crucially tackling that issue of unscrupulous landlords.”

The housing investment fund has generated a £2m surplus to date from the interest paid by developers, with a further £10m expected in the next three or four years.

The use of the surplus funds was agreed by the combined authority leaders along with proposals to provide further funding for city centre housing developments.

Sir Richard Leese, leader of Manchester city council, emphasised that city centre developments have provided a vital source of homes and were not merely a financial asset.

He added: “There is a tendency to look at city centre housing as some form of financial asset, forgetting that those apartments that have been built, they are people’s homes, virtually none of them are empty.

“Given the state of the housing crisis you might ask if they hadn’t been built and they weren’t living there, where would they be? This is providing homes for people and we should not lose sight of that, either.”

Mr Dennett’s report explained that ‘it is proposed that £350k of GMHILF (GM housing investment fund) surpluses be approved to be used to fund the necessary work to identify concrete proposals that align with the affordable housing priorities’.