Crusader Mill External

Housing fund loan goes to Capital & Centric

Jessica Middleton-Pugh

A loan of £25.5m to Capital & Centric to fund the conversion and extension of the grade two-listed Crusader Mill into 201 apartments has been approved by the Greater Manchester Combined Authority.

GMCA signed-off the latest loan from the £300m housing investment fund at its meeting on Friday 29 July.

The fund has already been allocated in full, with the first loans being repaid, enabling new allocations to be made. GMCA is targeting committing the pot at least two times over during its five-year lifespan.

Other beneficiaries from the fund include Trafford Housing Trust, Renaker Build, Urban & Civic and Select Property Group, as well as a range of sub-£1m projects in Greater Manchester’s towns.

Crusader has an overall development value of £50m, and has proved popular since the flats were launched for sale off-plan last month. The apartments are only available for local owner-occupiers to buy, rather than overseas investors. The architect is Shedkm.

Ahead of the GMCA meeting, John Moffat, development director at Capital & Centric, said that the company wanted to create “a genuine community at the heart of the city… not just white boxes void of any identity.”

“This is ultimately the peoples’ money we’re borrowing, therefore we owe it to Manchester to deliver something special,” he continued.

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Now the ‘local homes for local people’ (unenforceable) marketing fluff from C&C on this development makes sense.

By Spock

Is this the GM fund? Or the Central Manchester fund?

By Elephant

Am intrigued by this loan of £25m from the Greater Manchester Combined Authority to a private developer for private ownership apartments.

This isn’t for social housing and originally they said 10% was for local buyers only. Now they claim not for overseas investors at all.

Their PR stunt was covered by the local press using attractive young people who seemed able to make the £285,000 price tag per two bed flat. To me, that doesn’t even register as affordable housing. I can’t imagine many ‘local’ people being able to afford those flats.

While it may ‘gentrify’ the local areas, I doubt it will improve the social or existing ‘local’ housing stock around it. The development will be worth £50m post build. The loan equates to £125,000 per flat. Now I reckon it doesn’t cost them that to build each one, and if they sell each one at a max of £285,000 off plan (£165K for a one-bed), they’re making a very healthy return on a cheap government-backed loan.

The city centre needs family accommodation, parks, schools and wider amenities for it to work. Without it, it won’t have a community at all. Communities are just one cohort of people. For the more the families are pushed further out, the fewer amenities there will be for others. New Islington Free School is an exception. Don’t ghetto the locals.

Will there be:

No rentals at all (no subletting etc)
How are these affordable?
How does this development meet the affordable and social housing rules?
What social plan is in place to integrate into the local community
What do C&C define as locals? Within the Greater Manchester Area or beyond?
Seeing as this is people’s money, shouldn’t there be more scrutiny over ‘promises made’

Will they disclose the locations of the buyers (e.g. postcodes?).

GMCA has to play fair and not hand out cash to developers based on ‘promises’ only. It’s right that fabric of Manchester is preserved and none more so than the industrial mills such as Crusader Mill. Just do it fairly and openly.

By Rightly Cynical

in fairness they’ve done more to address it than anyone else in this city, yes it’s good marketing but it’s also a good way for owner occupiers to get a foothold

By Sam Harlow

I think ‘Rightly Cynical’ that there are a number of factors here, I read that they’ve targeted owner occupiers and aren’t seeking to provide social housing. The GM money is supposed to be a loan on commercial terms, not a grant, so like every other development in the centre there is no affordable housing requirement. Rightly or wrongly they have at least made an effort to sell to people that need somewhere to live rather than just investors. I hope it encourages others to do the same.

By Clare Yates

Sam – other than saying they’re not for overseas investors, what are they actually doing? The best C&C has said is that they will take buyers “at their word” if they say they are owner-occupiers.

£165k for a one-bed? That’s strange because at the launch event they were more like the £200k mark for a one-bed. Yes, really.

“Not just white boxes void of any identity” – what about that new build bit latched on the end then?

They may be better than most, but this is hardly atypical developer behaviour. The fact its being dressed up as some sort of social good is actually all the more cynical.

By Spock

Spock is right: it’s unenforceable and is nothing more than a PR stunt to gather a positive buzz about them. What Jess also conveniently fails to mention is that they are only selling 10% (20 units) to locals.

By Raj

Its important to note that one persons housing need is as important as the next, city centre apartments will be bought by people that work in the city and get well paid, so they wont be cheap, but I don’t think thats all bad. What will be important, as the city grows quickly, is to ensure there are also low cost housing options, they will need to be built in sensible locations, such as the city fringe. I’d also like to see more apartments sold to people that will live in them, thus adding to the local economy through work and spend. Its not perfect I agree, but its better than the rest.

By Kinda Right

Can all the people who are whinging about the developer mentality (and profiting from building new homes) please provide a brief summary of what they are doing to help solve the housing crisis?

Not much I suspect.

By Steve

Hi Steve,

The problem is due to the fact we are primarily expecting profit-driven developers to deliver the housing supply needed to address the crisis. Instead of allowing direct state intervention (i.e. wide-scale public housing), we are instead allowing the state to distort the market and hoping that will solve something.

These flats would sell anyway, and this developer would be able to secure finance – just not as cheaply and easily without the GM fund. Therefore, its not the most effective use of public money, in my opinion.

I can’t do much to change this other than raise my voice about it, which I’m doing on a website frequented by people in the industry. That’s what I’m doing.

Besides which, I’m sure most people on here could point to whatever their role in the development chain is and say that they’re “helping solve the housing crisis” in the same way you appear to suggest C&C is solving the crisis here. Its a wider point that goes beyond who is building what, because its a problem that won’t be solved unless we fundamentally change the way housing is delivered.

Good luck to C&C with this one – it looks like a good quality conversion (and part new-build lets not forget) targeted at the yuppie market. However, I find the pretense there’s some kind of social good behind it entirely distasteful.

By Spock

Well said Steve. Lots of people on here moan but I suspect very few actually make any attempt themselves to improve matters as no doubt that is always “someone else’s job”. I went to the launch and I looked at their web site. The developer has stated numerous times that they’re selling all to owned occupiers, not just 10%. Yes it doesn’t solve the entire housing crisis but at least they are doing something to help unlike the moaners on here.

By Jane Openshaw

If the loan increases supply over and above what would otherwise be achieved then it is helping solve the housing crisis.

By Anon2

You’re telling me this scheme couldn’t be funded without public intervention? It’s not the role of public money to undercut traditional lenders by providing a cheaper option

By Bay

If it was a social housing provider delivering it they’d spend the next six yeas deliberating about doing it and then find they can’t make it viable. Good on C&C.

By Brian Makin

Felt compelled to make a post on Cruscader, C&C (proud to be managing this wonderful regeneration community once complete) and Manchester .
From an enforcability point of view, it is possible to restrict sub-letting and AST’s via the lease. We are meeting the legal partners this week to finalise covenants but C&C’s committment to making this scheme 100% owner occupier is 100% genuine.
These guys have proven track record in creating community in their commercial schemes and the same will be acheived with their residential. The plans are brilliant, C&C’s ambition is limitless.
In terms of price, the owner of any asset will maximise the value and not sell under what the current market rates are. Demand is there at these prices. Is a city centre apartment scheme in a regenerated beautiful mill in very central Manchester expected to be ‘affordable’ to the masses? No – this is the local authorities problem to sort. C&C are making a much needed contrinution to the city by further extending its core. They had queues out of the door and I expect they’ll do very well with futute releases at the prices they have set. The ,market is there at the prices set. Demand, Supply, Price. Basic economics.
In terms of affordability – the current capital prices have shot up in the city in the last 3 to 4 years as we are not supplying close to the level of homes Manchester needs. This will change from 2019 onwards when serious supply will take effect and 25k apartments will quickly be 35k/40k. Basic economic means price changes. Older, less attractive apartments will reduce in price, the market will have stratification just like commercial property and city centre living will offer better affordability. We’ve seen it this summer with Greengate, Slateyard, Cambridge Street, X1 plus a couple Renaker Schemes going live which has softened the rents in the BtL marketr
Elongating voids on BtL apartments (1k available units in city currently vs 700 last summer) and making landlords drop prices.
Finally, Owner Occupiers have been snuffed out of buying apartments for some years now. Traditional agents sell to their investor clients to double up on fees (sales fee then the lets finders fee and mgt fee) and quicken process as many BtL buyers can exchange/complete with less risk of dropping out and in shorter timescales.
There is a significant latent demand of city centre residents who have rented for sometime and now want to buy but can’t get access to the market. This will change in 2018/19 and onwards as BtL sell up and new developments are opened up more to UK purchasers.
These are only my views but taken from observations of more matrure residential markets around the globe. We’re treading the same path as the US and continental europe and I think we should all be really very happy Manchester is literally a global ‘go to’ destination now for many people wanting to invest in Real Estate. This is a great city – be proud of developers like C&C and your council who are working hard with Salix Homes, Sigma Capital and other projects to deliver affordable housing.
Thanks, Michael. MD & Owner urbanbubble

By Michael @ urbanbubble

Might take the last post a little more seriously if the poster wasn’t being paid by the developer to manage the development!

By Anon

Hi I’ve reserved one of these apartments as I work walking distance away. I only needed to provide a 5% deposit whereas other developments were asking for 30% which I simply couldn’t save up. As I understand it Capital & Centric are selling all to owner occupiers, they’ve only released the initial 10% so far. I wish more developers would do the same, lots of my friends and colleagues are struggling to buy, we get overlooked by developers that seem to favour investors instead.

By Reserved

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