Infrastructure investment unlocks private investment – that’s how the logic goes.
From major rail projects to roads, broadband to utilities, the argument is that pumping money into infrastructure helps private investors with certainty, providing impetus for large-scale commercial, retail and housing projects.
And largely, the adage of ‘build it and they will come’ rings true, particularly for big-money investments like rail and road.
But in Manchester, where there has been heavy investment in the region’s transport system, it’s not coming true just yet.
The city’s Metrolink tram has been expanded to stretch from the Cheshire borders in Altrincham to the edge of the moors in Oldham, with the purpose of joining up Greater Manchester through one accessible transport system.
The argument that investing in infrastructure will help local areas to thrive was made at the time and is still being made now – but how effective has it been so far, particularly for the housing market?
To give a blunt answer: not very.
Housing starts across all boroughs touched by the Metrolink’s recent extensions – Oldham, Rochdale, Tameside and Trafford – are all still below their pre-recession peak, and in some cases less than half the level they were in 2007 and 2008.
Of course, it would be naive to think that transport upgrades transform housing development overnight.
In Salford, the opening of the Metrolink’s Eccles branch in December 1998 didn’t lead to an immediate bounce, but over the course of six to seven years private development did ramp up significantly – helped by the expansion of Salford Quays, among others factors.
While development is still to take off in the more recently connected boroughs, the effect Eccles branch suggests an eventual improvement can be realised – given the right economic climate and careful management from local government.
That’s where the regional devolution agenda will come in.
Speaking to Construction News today after another year of bumper results, Redrow CEO John Tutte said it was “very early days” when it came to the devolution agenda and how it could help housing investment, but added that his firm already had a strong relationship with both Greater Manchester and Liverpool councils.
And he was not unduly concerned with Manchester mayoral candidate Andy Burnham’s plan to use the city’s £300m housing fund for public housing investment, rather than private.
”There’s enough land to go around and enough demand in the marketplace,” he said.
With housebuilders keen to get schemes under way and mayoral candidates putting housing top of the agenda, the limited impact of infrastructure on Manchester’s housing shortage to date may be about to change.
Also in the news
A major framework for Barnet council worth £150m has been delayed, with two bidders already on the shortlist.
Better news for housing in London, with mayor Sadiq Khan approving a revised plan for 10,000 homes at Barking Riverside.