Council signs landmark deal with pension fund
A council has signed the first deal of its kind to build homes through an innovative agreement with a pension fund.
Manchester Council announced yesterday it had signed a memorandum of understanding with the Greater Manchester Pension Fund and the Homes and Communities Agency for a new way of funding house building.
Under the model, which will initially be used to build 240 homes, the council will put in land while the pension fund will provide finance for the development. The Homes and Communities Agency is also putting in one site. This will reduce for risk for the developer, which is yet to be appointed, allowing homes to be let or sold at below market rate.
The council hopes the homes will be sold for 20 per cent less than market rate. The council will take an equity stake in the homes, and the partnership will generate revenue to reinvest from rents and sales.
The council will appoint a property manager to manage the rented properties.
Jim Battle, deputy Leader of Manchester Council, said: ‘Manchester’s growing population and forecasted economic growth will 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.’
Deborah McLaughlin, north west executive director at the HCA, said: ‘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.’