Mayor defends housing loan fund that’s being sued over ‘subsidising’ giant developer

Photo: GMCA

Greater Manchester mayor Andy Burnham

Andy Burnham has defended the housing fund the Greater Manchester Combined Authority (GMCA) is being sued over for allegedly ‘subsidising’ a giant developer.

The GMCA, which the mayor heads up, is subject to legal action from major city centre landowner Aubrey Weis. Mr Weis claims loans from the GMCA ‘have distorted the operation of the market for property investment and developments services in Manchester’.

Specifically, he alleges two loans worth nearly £140 million given to special purpose vehicle companies owned by developers Renaker breach the Subsidy Control Act 2022.

His Notice of Appeal added: “The [GMCA] approved a £70.8 million and £69.2 million loan to Trinity and Jackson respectively as part of the Greater Manchester Housing Investment Loan Fund (HILF). 

“[Mr Weis] challenges the decision to make the loans and / or to do so at the proposed rate of interest and / or on the proposed commercial terms.

“[Mr Weis] is concerned that the loans have distorted the operation of the market for property investment and developments services in Manchester, enabling Trinity and Jackson to undertake projects they could not otherwise perform at a lower cost than would otherwise be the case and / or providing them with a competitive advantage relative to private competitors.”

Now, Mr Burnham has dismissed the idea the HILF was designed to lend money to developers cheaply. Speaking at a GMCA scrutiny meeting on Wednesday (23 October), he said: “The reason why [it was created] is not because loans are not being done at commercial rates; it’s done very rigorously and properly. 

“There has been not one default. They have always been repaid.

“Why was the fund created? Because London finance organisations would not back housing finance schemes in Manchester at the time. 

“We had schemes at the time in the city that were viable but could be funded. We were not being backed by other finance at the time. By backing ourselves we have shown we can do it.”

The mayor also said returns from the fund have gone to other projects: “We have recycled the funding into wider housing improvement in GM and some social housing schemes. The Good Landlord Charter is supported by this.”

The Competition Appeal Tribunal, the body which will decide on the case, says Mr Weis’ case remains active, but only the Notice of Appeal has been published as part of the proceedings thus far. In August, GMCA figures said it would take ‘six months’ to get an outcome.

Ethan Davies, Local Democracy Reporter