King of the North must win over the holders of the purse

As mayor of Greater Manchester, Andy Burnham championed revitalising neighbourhoods, investing in infrastructure, and the creation of homes for local people – earning him the nickname ‘King of the North’.

Now, having stepped into the top job as Prime Minister, the property sector is set to discover whether this commitment will spread across the UK, helping rejuvenate towns and cities, and encouraging investors to launch, grow or diversify their portfolios.

Burnham has already pushed his devolution agenda, and suggested policies around more social housing, stronger tenant protections and property taxation changes – and these will undoubtedly have an impact on investment decisions in the coming years, as the future of the market is shaped and revealed.

Making a mark on Manchester

By taking advantage of devolved powers, Greater Manchester authorities were able to allocate £115m to develop 92 brownfield sites. Affordable housing and town centre renewal were key to the area’s regeneration plans, as was developing partnerships between the public and private sector to boost property values, empower investor confidence, and encourage increased commercial activity in key locations such as Manchester city centre, Stockport, Salford and Trafford.

It is these relationships which many hope will be cemented across the UK as part of Burnham’s plans. We know that private investment doesn’t just benefit landlords: it helps fund new developments, support construction jobs, and boost local communities.

Rightmove data shows a 63% house price increase over the past decade in Manchester, compared to 7% in London during the same period. Burnham can’t take all of the credit for this, of course, but it does provide hope that he will be able to translate that same success into a national programme of regeneration.

While this progress has been happening in the north, national media headlines have been dominated by Labour’s target of building 1.5 million new homes in five years – one of former PM Keir Starmer’s key manifesto pledges. The latest figures based on EPC registrations show 392,400 have been built over the past two years, representing just over a quarter of that promised amount.

It’s of note that brownfield sites, rather than new developments, were the focus of the regeneration in Manchester, demonstrating that the approach of renovation rather than building from scratch can and does work on a regional scale. The CPRE estimates there are 27,200 brownfields sites across England, with capacity for 1.4 million units – meaning a pivot towards redevelopment on a national scale could well be more beneficial when it comes to solving the housing crisis than the push for new builds has been.

Plans in the pipeline

The property industry could also benefit from plans to invest the additional council tax and business rates into future regeneration. We all know this focus on growing the sector is much needed due to the challenges and new regulations of recent years, which have seen residents priced out of the market, investment returns fluctuating, and landlords selling up in droves.

As part of his strategy, many will be hoping that Burnham softens his stance on permitted development rights – which in the past he has spoken out against – and will begin to recognise their worth in supporting regeneration of towns and cities, particularly where commercial properties lie unused in sought-after areas.

At the heart of Burnham’s approach is the Good Growth Model, which puts regeneration, local decision making and private investment at the centre of economic growth. Rather than expecting Westminster to fund every project, the idea is to give local leaders more control while encouraging businesses and investors to help deliver regeneration.

If it can be successfully evolved into a UK-wide framework, then we should see more emphasis placed on combining several sources of finance to fund infrastructure and housing projects. With greater autonomy for local councils, and less interference from Westminster in planning matters, this in theory allows regions to decide priorities and projects for themselves – focusing on where, what and how to build to best support local residents and businesses. But they need the capital in order to do so more freely.

The challenge, of course, centres around turning all of this from a pledge into a reality. To scale up the model Burnham oversaw in Manchester, he must ensure the industry is on-side – and that includes everyone. Not only councils, but also the private developers and investors who will be the difference between make or break.

Right now, this is all a pipedream unless he gets the backing, and continued support, of those with the resources to truly make a difference to the property market. Because investors will look elsewhere if they don’t believe that the opportunities the Good Growth Model offers them are lucrative enough. We have already seen them turn away from the traditional buy-to-let model, towards alternative avenues of growing their property portfolio. And unless they feel the returns are high enough, they simply won’t get involved in Burnham’s grand plans.

The PM can hand as much power as he likes to local authorities; he can win the favour of renters and buyers alike through his promises; and he can wear his ‘King of Manchester’ label with pride. But unless would-be funders feel invested in his plans, they won’t invest. It’s as simple as that.

Reece Mennie is the Founder and CEO of HJ Collection.