A publicly financed housebuilding initiative has been agreed by Greater Manchester Pension Fund, Manchester City Council and the Homes & Communities Agency.
Initially the scheme will deliver 240 units on five sites across the city for sale or rent. The purchase price will be 20% below full market value.
Four sites will be provided by the council and one by the city council. Greater Manchester Pension Fund, which invests local authority staff pensions, will finance construction.
Together the partnership will choose a contractor to build the homes and a property manager to manage the rented properties. The city council will take an equity share in the properties, reducing the need for a deposit, which the local authority said will 'make the new homes more affordable and mortgage costs lower'.
The partnership will generate a revenue return from their investment through rents and a capital return through house sales. The local authority will roll out the model if successful.
The five sites are:
- Former Oakwood, Darley Avenue, Chorlton Park: 86 units
- Former Ossingotn Court, Hawkswick Drive, Brooklands: 30 units
- Former Woodwise Nursery, off Woodwise Lane, Brooklands: 17 units
- Off Clowes Street, West Gorton, Ardwick: 35 units
- Gorton Monastery, off Gorton Lane, Gorton North: 76 units
Cllr Jim Battle, deputy leader of Manchester City Council, said: "Manchester's growing population and forecasted economic growth mean we will continue to need more homes in the near future. The economic climate has severely slowed home building in recent years and levels of development are not keeping up with the city's demand. This new innovative model tackles these issues, pushing forward development opportunities while ensuring a supply of new attractive homes are available to residents at affordable prices."
Cllr Kieran Quinn, chairman of Greater Manchester Pension Fund, said: I'm proud that we are able to use the pension fund to invest in the building of much needed homes in Greater Manchester whilst securing a good return to fund the pensions of the workforce."
Deborah McLaughlin, North West executive director of the HCA, said: "This is great news for Manchester. In the current economic climate, innovative funding models will play a fundamental role in supporting the delivery of much needed affordable homes for local people.
"At the HCA our focus is to employ new and innovative ways of working to use public land assets to more quickly deliver homes and economic growth. This new concept marks a major milestone for house building in Manchester and has the potential to attract major investment to the city."
The Greater Manchester Pension Fund is advised by GVA.