Council chiefs have unveiled radical plans to help the housing crisis by launching a ‘Manchester mortgage’ for first-time buyers – and £25m of pension cash is to be used to build new homes.
Bosses have identified five sites on which it aims to build nearly 250 properties for sale or rent as part of a pilot scheme.
The Greater Manchester Pension Fund will pay for the construction costs and the programme could be rolled-out over 10 years if it proves successful.
As part its plans, Manchester council also wants to create a mortgage guarantee scheme to help people get on the property ladder by underwriting up to 20 per cent of their loan.
New homes built with pension fund cash would be in Chorlton, Wythenshawe and Gorton
Talks are underway with the Co-operative Bank and Manchester Building Society about the Manchester mortgage concept. It would mean home-buyers would be able to get a 95 per cent mortgage on similar terms as a 75pc one, without the need to put up a substantial deposit.
Town hall bosses have come up with the proposals due to the supply of housing in the city reaching an all-time low, with the number of house sale completions plummeting by more than 75pc over the last five years.
Coun Paul Andrews, executive member for neighbourhood services, said: "In the current economic climate, the levels of development being brought forward and the availability of mortgage finance are not keeping pace with the city’s needs.
"That’s why the council, working with Greater Manchester Pension Fund and the Homes and Communities Agency, is looking to bring forward an innovative new model for investing in new housing which will help address this issue."
Four sites owned by Manchester council and one by the Homes and Communities Agency have been identified for 244 new houses to be built.
The council would form a joint-venture with the pension fund for the scheme. The council will invest land, while the pension fund will pay for all construction costs.
The plans for a Manchester mortgage would see the council team up with a High Street lender and underwrite up to a fifth of the loan for a fixed period of five years, which could rise to seven. The criteria for who would qualify for the scheme are to be decided.
The council’s executive gave the green light for the partnership with the pension fund – whose members work for Greater Manchester’s 10 local authorities – to be formed.
A pension fund spokesman said: "GMPF is working with the council to deliver new homes that will satisfy the fund’s twin aims of commercial returns and supporting the area. This type of investment will be part of developing a diversified portfolio. The initial scale of investment currently being considered is up to £25m.
"The aim is to create an approach to investment that is capable of being applied across Greater Manchester. GMPF has a long history of investing a small proportion of its assets locally with the twin aims of commercial returns and supporting the area."
New homes built with pension fund cash would be in Chorlton, Wythenshawe and Gorton
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Saving for a deposit is hard. If you cant save up and put the money away now how are you going to cope when all the extra bills come in?
What a great headline, at first sight, but then the body of text tells us Manchester Council solution to the housing shortage is a TEN year plan to build 250 houses, that works out at 25 new homes a year. It is time to invest in the many boarded up councils houses across Greater Manchester and get them ship shape to open up to people at affordable prices. The problem is that when it comes to creative ideas we end up with too little too late. 25 homes a year will not even take care of natural increase in the GM population's need.
I bought my first house in 1977 with a "council" mortgage. Nationwide with whom I was saving would not give me a mortgage as I was a "single" woman!
Manchester City council subsequently sold the mortgages to The Halifax.
Plus ca change plus c'est la meme chose.
Good news.
It seems that parts of Greater Manchester are growing in population again (Manchester and Salford, at least, as far as I know...) so we need a LOT more new homes.
Good news, but it will be interesting to find out which particular demographic actually obtains these properties.
those who dont learn from history are doomed to repeat it...
"Housing supply in Manchester is at an all-time low" - below a picture with 11 'for sale' / 'to let' boards?
What nonsense, what is needed is more social housing, as we already are awash with private homes-to-buy, which nobody can afford to buy. This is supposed to be a Labour council, but is more Tory than the ConDems.
250??!!
That's not even a drop in the ocean! Why even bother?!
I'm stuck renting cos I can't afford to get on the property lader, and I earn over £40k. Where's my property help, please?
"As part its plans, Manchester council also wants to create a mortgage guarantee scheme to help people get on the property ladder by underwriting up to 20 per cent of their loan"
It occurs to me that an outside funder agreeing to stump up 20% of the asking price will lead to sellers increasing the asking price by 20%.
Is that a good idea?
Here's an idea to solve the housing crisis. Fix all the boarded up empty homes all over the region. There are thousands and thousands of empty properties. The problem was recently highlighted in a channel 4 programme. I drive past 10 3 story houses in Salford every day. They have been boarded up and left to rot, while the waiting list for houses grows all the time.
Hahaha, 250 homes. That's nowt - nowhere near enough.
How is this going to help anyone?? there are new homes springing up all over the place that people cannot afford to buy - they then get bought by greedy landlords who rent them at extorionate prices. There are old properties falling apart that nobody bothers with - all they would need is a little TLC and a bit of modernisation.
I did look at buying the rented property I live in. I would have to find £13k deposit and my monthly payments would be double the rent I am paying now - so there is no point!
Why not build the houses to rent for the less affluent members of our society.
For local indigenous people please!
what assurances are there that houses wont be re-sold at profit weeks later or simply sold to someone with the intent on letting it out immediately for profit?
Build 250 new homes? Has anyone been in an Estate Agency and been told there are no properties for sale? Nor me either...
Of all the areas to build them in... what a waste!
Seems to me to be a bit of a conflict of interest here. Who is on the Board of the GM pension Fund? Council Chiefs. Who is proposing to have the pension fund get involved in this high risk venture? Council Chiefs. If its such a bargain why is the private sector not stumping up the cash?
This type of scheme makes my blood boil.
Using taxpayers money to prop up house prices...
When a FTB has to put his or her life savings on line they suddenly question if buying at historically high value-to-income ratios is such a good idea.
You see with the 95-100% mortgage there was no perceived risk, nothing to lose.
This is all about keeping house prices inflated at any cost. The government could not give a damn about housing shortages or FTBs.
This type of scheme makes my blood boil. Using taxpayers money to prop up house prices... When a FTB has to put his or her life savings on line they suddenly question if buying at historically high value-to-income ratios is such a good idea. You see with the 95-100% mortgage there was no perceived risk, nothing to lose. This is all about keeping house prices inflated at any cost. The government could not give a damn about housing shortages or FTBs.
Read more at: http://menmedia.co.uk/manchestereveningnews/news/s/1481128_the-manchester-mortgage-250-new-homes-plus-loans-for-first-time-buyers-in-bid-to-tackle-housing-crisis
I sold up in 2006 for work reasons. Today I rent, 675 a month for a two bedroomed rabbit hunch. Where I want to buy and live I can't because house prices are extortionate and so would the deposit. This is a good initiative if it works and is 'rolled-out' beyond the first 250 homes. I sincerely hope they don't build rabbit hunches. The council should recognise they have a unique situation here (if it works) so use it wisely. Manchester has been a leader with other initiatives, so please, build homes with space (not rabbit hunches), are environment friendly and are priced to reflect the current market needs.
I confirm as not decided on standing in the mayor election for any party (not been asked) but it deffo will not be Labour. I do not agree to the Labour nomination clause that insists candidates signing up to having to abide by Labour National Party Rules. They state the National Executive Committee can make rule change. So who then runs Salford Council under any Labour mayor. OMG what if same clause applies to their Labour candidate selection for Commissioner of Greater Manchester Police - politics going mad or what ?