Member Article

Pension fund fuels Manchester house-building JV

A new investment fund scheme has been devised to bring forward housing projects in Manchester.

The Housing Investment Fund will use available development land owned by the City Council while an investor finances the build, delivering 241 homes.

The aim of the joint venture, financed by the Greater Manchester Pension Fund, is to stimulate home building in the city at a time when property development has been stymied by the economy, while reducing the usual risks associated with a development as the contractor’s overheads are minimised and they have no sales risk.

Wates Living Space has been chosen as the development contractor to build the homes and have been working with the joint venture project managers to draw up planning applications for the five site scheme that will be submitted to the planning authority in December.

Plumlife have also been appointed as the sales and marketing team for the for sale properties, and Places for People have been chosen to act as agent to let and manage the rental properties. GVA will act as the technical supervisor for the partnership.

Pozzoni are the architects for the development.

A tenure mix across the five sites, including a site offered by the Homes and Communities Agency (HCA), has been developed to ensure each location fits in to the property requirement for the local area – including appropriate levels of owner occupation and private rented properties.

Buyers will be able to access the government’s Help to Buy equity scheme to receive up to 20 per cent towards the value of the property, making the new homes available to purchasers who can sustain a mortgage but may not have the required deposit.

The partnership will generate a revenue return from their investment through rents and a capital return through house sales.

It is hoped the Housing Investment Fund will be heard by the planning committee early 2014, and if approved start on site will begin Spring 2014.

Cllr Nigel Murphy, Manchester City Council’s executive member for housing and regeneration, said: “Manchester’s forecasted population growth in the coming years means we need to act quickly and innovatively to ensure our housing stock is capable of supplying the demand. Our Housing Investment Model is one way we are supporting residential growth – pushing forward development opportunities to ensure new and attractive homes are available and affordable to residents.”

Cllr Kieran Quinn, Chair of the Greater Manchester Pension Fund, said: “The current economic climate has seen home building slow down to an almost standstill, with levels of development not keeping up with the demand throughout Greater Manchester. This new innovative model tackles these issues by promoting development opportunities while at the same time ensuring new attractive, affordable homes are available for our residents.

“I’m proud the Greater Manchester Pension Fund is willing to invest in the construction of much-needed homes across the county while also securing a good return for our members’ pensions. It’s great to see that the Fund is able to take advantage of this opportunity to invest in new homes that are so clearly needed in Manchester.”

Deborah McLaughlin, North West Executive Director at the HCA, said: “The appointment of delivery partners for the Greater Manchester Housing Investment Fund is a major step towards us seeing work start on the ground. In the current economic climate, innovative funding models such as this play a fundamental role in unlocking housing schemes and driving economic growth, so I’m looking forward to seeing how things progress in 2014.”

Lee Sale, Regional Business Director for Wates Living Space, said: “We’re really pleased to be named Manchester’s strategic housing partner and bring to bear our expertise in the creation of new, high quality affordable homes. Our appointment will also unlock a number of local training and employment opportunities for local people throughout the city as we work hard to ensure that our role in the project delivers true social and economic value.”

This was posted in Bdaily's Members' News section by Simon Malia .