Andy Burnham defends £800m taxpayer loans for luxury skyscrapers

Telegraph

16-03-2025

Andy Burnham has defended his administration's controversial decision to hand £800m of taxpayer cash to a skyscraper developer that has not built any affordable homes in the city.
The Labour Greater Manchester Mayor said the loans to developer Renaker had helped deliver 'high-quality infrastructure that the city needs' and 'driven our growth'.
Mr Burnham said he stood by the arrangement with Renaker, which is the subject of a High Court challenge by a rival.
It comes amid scrutiny of the loans to Renaker, a property business owned by millionaire developer Daren Whitaker. Rival developer Weis Group, which has bought the High Court claim, last week wrote to Darren Jones, the chief secretary to the Treasury, to urge him to investigate the arrangement, citing 'serious concerns'.
Renaker has been building luxury towers across Manchester with money borrowed from the Greater Manchester Combined Authority (GMCA), which Mr Burnham chairs. Nearly £600m has been lent by GMCA's Housing Investment Loans Fund and £200m has come from linked affiliates.
Rival developers have claimed the significant support for Renaker is distorting the local market. It is thought the towers have also not produced any low-priced homes, despite Mr Burnham's pledge to tackle the city's housing crisis.
Mr Burnham said the GMCA's housing fund was intended to 'bring regeneration' to Manchester, rather than deliver affordable homes.
He told The Telegraph at the MIPIM property conference in Cannes: 'Renaker, in my view, should be commended for the commitment they've made to Manchester. The fund was created because London-based organisations wouldn't make a commitment to Manchester.
'In the 10 years since that fund was set up, Greater Manchester has been growing faster than the UK economy at 3pc a year. Housing growth through the fund has hugely driven that.
'[Renaker is] building out high-quality infrastructure that the city needs, that has driven our growth. It should be celebrated as a success story, without an implication that there's something wrong.'
Mr Burnham added that there had 'not been a single default' on loans made under the taxpayer fund.
The Labour Mayor said the proceeds from the loans will help pay for housing initiatives, including a 'good landlord charter' aimed at raising standards in the city's private rental sector. He added that returns from loans had also paid for some social and affordable housing outside of the city centre.
He said: 'You've got to balance it with the other things that we're doing as a city region.'
The GMCA is contesting a High Court case lodged by rival developer Weis Group claiming that it has unfairly lent taxpayer cash to Renaker. There is no suggestion of wrongdoing by Renaker, and the authority says it has acted fairly.
Lawyers for Weis Group wrote to Darren Jones, the chief secretary to the Treasury, this week to urge the department to investigate the fund and how its loans are being used, citing 'serious concerns'.
The letter, dated March 11 and seen by The Telegraph, called for more scrutiny over financial viability assessments submitted by the developer in its planning applications and in its applications for loans from the fund.
It also alleged a significant proportion of the flats Renaker has built are now owned by overseas investors and were 'marketed directly to foreign investors months ahead of anyone in the UK'.
Telegraph analysis of Companies House filings last year suggested that hundreds of flats in two taxpayer-backed skyscrapers have been sold to Asian investors.
A spokesman for the GMCA said: 'The lending criteria for the Fund are based on parameters set by central Government and we have not turned down a single viable scheme which met those criteria.
'In the past nine years, the Fund has helped unlock more than 11,000 new homes across the city-region, supporting a wide variety of developers and projects and helping to regenerate brownfield sites at no cost to the taxpayer.'