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”.