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National Housing Federation Annual Housing Development Conference What Happens Now to Regeneration Schemes?- Housing Market Renewal in Manchester and Salford Richard Elliott 11 July 2011
National Housing Federation
Annual Housing Development Conference
What Happens Now to Regeneration Schemes?-
Housing Market Renewal in
Manchester and Salford
Richard Elliott
11 July 2011
• Housing Market Renewal Partnership between Manchester and Salford City Councils, working with local communities to restructure the local housing market, has achieved a lot since 2003
• Recession coupled with loss of funding has had major implications for the pace of change and led to the need for new delivery models
• Housing market has inherent strengths but still faces major challenges – continued dis-connect between some communities and employment offer
• Housing growth is an integral part of wider city region growth ambitions
• Scale of task still remaining is considerable
• Levels of Deprivation Still High (MSP area within the most
deprived 10% LSOAs Nationally)
OVERVIEW
The Need for Action -
Population Decline 1951 - 2001
Achievements
• 13,000 Homes Refurbished• 1,132 new homes as a direct consequence of
HMR• 14,000 new homes delivered in total in MSP
area• Manchester 1 of only 6 authorities in England
and only one outside SE to record 10% population growth 2005 -10
• 59 hectares of land assembled• 70,306 households benefitted from
improvements to land surrounding their homes• Private sector match funding £64.75m
MSP KEY OUTPUTS – 2003/10
BESWICK
BESWICK
TOXETH STREET
TOXETH STREET
LOWER BROUGHTON
LOWER BROUGHTON
HIGHER BROUGHTON
HIGHER BROUGHTON
Current Housing Market
Overall sale prices
£0£20,000
£40,000£60,000£80,000
£100,000£120,000£140,000
£160,000£180,000
00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10
Overall Sale Prices by GM District
Avera
ge s
ale
pri
ces
Manchester Salford
PRICESPrices in MCC (-9.3%) and SCC (-11.1%) remain below market peak
MCC acute & stabilised / SCC softer but prolonged
SALESSimilar overall (circa 60%) falls in MCC (-62.4%) / SCC (-60.4%)
In line with prices MCC fell first (2006/7) / followed by SCC (2007/8)
Total Number of Sales
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10
Overall Sales by GM District
To
tal n
um
be
r o
f s
ale
s
Manchester Salford
Figure 19 - % of gross total lending by Loan to Value Ratio
(2007-2010)
0
10
20
30
40
50
60
70
80
200
7 Q
1
200
7 Q
2
200
7 Q
3
200
7 Q
4
200
8 Q
1
200
8 Q
2
200
8 Q
3
200
8 Q
4
200
9 Q
1
200
9 Q
2
200
9 Q
3
200
9 Q
4
201
0 Q
1
201
0 Q
2
201
0 Q
3
Quarter
% o
f L
oa
ns
<= 75% >75% >90% >95%
MORTGAGE LENDINGDominated by lending to high equity transactions (75%+ LTV)
Source: Council for Mortgage Lenders 2010
MORTGAGE AVAILABILITYPenalties for low or no deposit borrowers remain
Lender Interest Rate Term LTV
2.19% 2 Years 65%
2.19% Feb-13 60%
2.19% 2 Years 60%
2.29% Jan-13 75%
Table 13 – National Top 4 Best Rate Variable Mortgages (tracker)Lender Interest Rate Term LTV
2.65% Feb-13 60%
2.69% 2 Years 65%
2.89% Jan-13 75%
3.29% Feb-14 75%
Table 14 - National Top 4 Best Fixed Rate Mortgages
Lender Interest Rate Term LTV
4.29% Term 90%
4.99% 2 Years 90%
5.49% Term 90%
Table 15 - Top 3 Best Rate 90% Variable Mortgages (tracker)
Lender Interest Rate Term LTV
4.99% Feb-13 90%
5.09% Jan-13 90%
5.09% Feb-13 90%
Table 16 - Top 3 Best Rate 90% Fixed Mortgages
Source: moneysupermarket.com 20 December 2010
ASKING RENTS & AVAILABILITYIncreasing rents & take up across all property types – apartments in particular
(2009/10)
DistrictApril
2009
April
2010
Annual
Change
April
2009
April
2010
Annual
ChangeCity Centre £519 £543 £25 52 37 -15
Manchester £401 £389 -£12 136 107 -29
MSP £412 £406 -£6 92 81 -11
Salford £453 £447 -£5 39 41 2
City Centre £602 £627 £25 477 316 -161
Manchester £516 £517 £1 843 715 -128
MSP £496 £480 -£17 570 446 -124
Salford £488 £469 -£20 381 256 -125
City Centre £803 £856 £53 853 630 -223
Manchester £682 £702 £21 1,660 1,287 -373
MSP £633 £653 £20 1034 810 -224
Salford £602 £615 £13 810 611 -199
City Centre £1,199 £1,603 £404 30 28 -2
Manchester £917 £964 £47 124 128 4
MSP £776 £804 £28 67 61 -6
Salford £760 £797 £38 43 19 -24
City Centre
Manchester £536 £521 -£14 364 284 -80
MSP £490 £490 £0 316 254 -62
Salford £515 £505 -£9 239 152 -87
City Centre
Manchester £760 £765 £6 346 436 90
MSP £726 £737 £11 158 253 95
Salford £705 £699 -£6 96 64 -32
City Centre
Manchester £992 £1,038 £46 331 393 62
MSP £973 £1,000 £28 184 249 65
Salford £954 £963 £9 63 53 -10
4 B
ed
AvailabilityAverage Rents
No houses on the market
No houses on the market
No houses on the market
Apart
ments
Houses
Stu
dio
s1 B
ed
2 B
ed
3 B
ed
2 B
ed
3 B
ed
Integrating Renewal and
Housing Growth
WORKING AGE POPULATION GROWTHGrowth in working age population mirrors new build sales and PRS growthSource: ONS mid-year estimates 2008Ageing + Births - Deaths + Net Migration (GP records, Child Benefit, Older Persons Register, National Migration Survey)
ACCOMMODATING GROWTH?Supported sales & strong PRS demand has helped us through so far but…
Maintain
Momentum
High
Quality
Housing
Retain
Graduates
Supported
Entry Level
Sales
Conurbation
Core Demand
Private
Rented
Sector
Attract
Economically
Active
Residents
BBC
Employees
High
Quality
Management
POPULATION, EMPLOYMENT & HOUSINGHouse building below growth forecast – PRS taking up slack - nearing capacity?
Comparing Population and Employment Growth with Residential
Development - Manchester / Salford (MSP)
0
20
40
60
80
100
120
140
160
180
200
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Ind
exed
valu
es b
ased
on
2000
(Year
2004 =
100)
Employment Population Net Completions
MS
P B
eg
ins
Sta
rt o
f R
ecessio
n
Cu
rren
t P
osit
ion
Completions forecast reflects a gradually
increasing proportion of the SHLAA potential
being delivered (initially 18%, growing to 75%)
THE INVESTMENT MARKETLinked with major infrastructure…
THE INVESTMENT MARKETOptimising commercial momentum & employment connectivity…
THE INVESTMENT MARKETIn the east and west of the city centre…
Remaining Challenges
LOWER BROUGHTON NOW
LOWER BROUGHTON FUTURE
NEW ISLINGTON NOW
NEW ISLINGTON FUTURE
BESWICK NOW
BESWICK FUTURE
SPORTSCITY NOW
SPORTCITY FUTURE
TOXTETH STREET NOW
TOXTETH STREET FUTURE
Index of Multiple Deprivation 2007
Forward Investment Framework
& Land Availability
EXISTING COMMITMENTS
BESWICK
TOXTETH STREET
LOWER BROUGHTON
The Way Forward
• Neighbourhoods not yet at the tipping point where private sector
alone can take task of regeneration forward
• Current market means that some public support is still likely to
be required to complete transformation
• High levels of deprivation still endemic in many neighbourhoods
• Private sector jobs growth at the conurbation core requires
residential development momentum to support it
• Multi- phase developments need resources to complete delivery
• Danger of “early movers” feeling isolated in half completed
developments
• Doing nothing is not an option given high costs associated with
management of semi – complete neighbourhoods
Maintaining Momentum
New Delivery Vehicles
• Investing public land as equity
• Deferred land receipts
• Build to rent privately - well managed /
intermediate
• Institutional investment
• Accelerated Development Zones/ Tax Increment
Financing
• Salford and Manchester are committed to continuing to work together – sharing learning and good practice
• Unsuccessful bids through RGF round 1 – poor fit between housing projects and programme
• Exploring potential of other funding sources eg New Homes Bonus and JESSICA/Evergreen Fund
• Critical need to identify a level of resource to maintain the focus on the task in very difficult circumstances –Some limited funding to support transition process
• Desire to continue to work with CLG and HCA to find ways of maintaining momentum
Way Forward
