The Greater Manchester Housing Fund has been much talked about after Labour mayoral candidate Andy Burnham pledged to renegotiate the terms to refocus investment on building affordable homes for rent.
The GMHF was introduced just over a year ago specifically to help residential developers kick-start schemes and tackle constraints in the residential finance market. Under the current arrangement, funding is intended to be fully recoverable and it is estimated that in this form, the money could be used 2.5 times over its lifetime to deliver a total development value of £1.5bn, or an estimated 15,000 homes over the next 10 years. By June 2016, it had already committed £100m of loans in support of nine schemes, in Trafford, Oldham, Salford and the city centre.
So what would diverting this rolling £300m pot away from market housing schemes, to only affordable rental products, do to the Greater Manchester market? In an affordable rental model, is it possible for the funding to be recouped at the same rate? I would have thought not.
Does this then mean that the fund has less of an impact on housing delivery? Is there even a chance that it could actually reduce the level of affordable housing provision that would otherwise be achieved by the fund due to less market housing being realised with a requisite percentage of affordable within it? As a result would prices continue to rise due to a shortage of supply?
Before we get carried away with these questions over the impact of Burnham’s pledge, will the mayor even be able to implement this kind of change?
The mayor’s powers will, in some respects, be limited to what he or she can get through the mayoral cabinet. With regard to planning, every council leader on the cabinet has to agree with what the mayor wants to push through.
When it comes to working with the Greater Manchester Combined Authority, will the mayor be able to tell the council leaders what to do? The focus cannot just be on the city, the mayor will need to take account of the bigger picture – economic, employment and infrastructure – and the needs of the surrounding M60 towns.
Surely therefore the priority must be the progression of the Greater Manchester Spatial Framework. Burnham has said that he does not plan to rip up policies that are already on the table if he gets elected, but I am sure he is not scared of changing things either. This framework is critical to the development sector, with many developers awaiting the greater certainty that it should bring to the market.
Another key issue is the green belt. A Labour mayor would perhaps be less concerned with fierce green belt protection than a Conservative mayor, but key decisions made ahead of the election will set the tone for development to come.
In my view, Burnham needs to concentrate equally on the needs of the private housing market and the supply of affordable homes. If he does become mayor, keeping everyone on board will be crucial to his success; a success that will be judged not just on reversing the fortunes of the social housing sector, but on whether he can deliver a positive framework for the housing sector as a whole.
Vincent Ryan, director, Barton Willmore
