£5.85B Manchester Apartment Boom Produces Precisely 5 Affordable Units

Just five affordable housing units were created in Manchester and Salford, a new analysis of 79 city apartment schemes, with a development value of £5.85B has revealed.

The Meteor reports new data from the University of Sheffield's Urban Institute showing that, if the guideline of 20% of affordable housing had been adhered to in the developments included in the study, a total of 5,125 affordable housing units could have been built, with 2,194 in Salford and 2,956 in Manchester. Instead the report showed that Salford saw five affordable housing units and Manchester saw none.

The research by Jonathan Silver, commissioned by Greater Manchester Housing Action, also showed the extent to which local councils were failing to collect section 106 contributions, intended to cover the additional infrastructure and services required by new development.

Salford city council collected £4.9M, and did not collect a further £18M available to it, making a section 106 contribution of just £444 for each new apartment.

Manchester city council collected in total just £856K, making a section 106 contribution of £54 for each new apartment.

Manchester insisted on a section 106 agreement covering just 8% of apartments built; Salford was more demanding, insisting on agreements covering 35% of apartments built.

Both councils remitted section 106 agreements and affordable housing on the grounds that it would damage the viability of the schemes.

Silver calculated the total development value of the 79 schemes assessed was £5.85B. This means the section 106 contribution amounted to less than 0.1%, which critics suggest is unlikely to have impacted on viability.

Data from JLL suggests a development pipeline of more than 9,000 units as developers and funds are drawn into a high-value market. This includes a prime
market around St John’s Deansgate, which saw sales regularly exceed £500/SF in 2017, JLL's Northern England Residential Forecast February 2018 said.

JLL data shows average sale prices up 8.75% in 2017, with rents up 3.2% with both rents and sale prices predicted to grow by around 3.5% a year up to 2022.

Manchester city council refuses to publish viability assessments but this is now being challenged by backbench Labour members of the Labour-controlled council, the Manchester Evening News reports.

Speaking earlier this month to Bisnow, Salford City Mayor Paul Dennett said he appreciated concerns and stressed Salford's relatively higher social contributions compared to Manchester.

“A lot of the affordable housing issue comes down to the viability assessments on private residential developments, which of course council officials pore over. I appreciate the concerns people have, but Salford still does better than Manchester at securing financial contributions from developers in lieu of affordable housing — we got £6.5M last year to Manchester’s £1.5M,” he said.

“We’re doing more: We’ve set up our own development company to acquire and develop low cost and social housing, and seeded it with £2M. But in the end the housing issues is down to viability and the real problems caused by government policy.”