When I say ‘MATRIX’ you probably think of the movie with Keanu Reeves from 1999. But when I think MATRIX, I think affordable homes.
Matrix Homes is actually the name of an organisation that built affordable homes and was established by Greater Manchester Pension Fund under the leadership of the late Cllr Kieran Quinn.
In 2014, Matrix built 240 affordable homes — and I don’t mean that rubbish excuse for affordable we often see, I mean truly affordable. Here’s how it broke down for the initial build in Manchester.
- Former Oakwood, Darley Avenue, Chorlton Park — 97 units (58 for sale, 39 market rent)
- Former Ossington Court, Hawkswick Drive, Northern Moor — 29 units (14 for sale, 15 market rent)
- Former Woodwise Nursery, off Woodwise Lane, Brooklands — 18 units for sale
- Off Clowes Street, West Gorton, Ardwick — 29 units (10 for sale, 19 market rent)
- Gorton Monastery, off Gorton Lane, Gorton North — 67 units (21 for sale, 46 market rent)
Like and pension fund GMPF wanted pay back, in this case over 25 years — the council in return for new homes built by GMPF monies, got a regenerated area (for almost nothing, ok they had to do some work and invest too there is no doubting this) and on going council taxes — a win win for all involved.
The scheme was over subscribed with rentals and buyers snapping at the heels. And no it wasn’t a buy-to-let market, these were disallowed.
Stage 2 was to be a further 1500 homes, followed by 3000 more with a whooping 10000 by 20,000 — That is what you call a pension fund investing in affordable homes!
But not only is it about homes, but its investing in social good for new homes owners, first time home owners potentially but also the construction industry and likely infrastructure too — because GMPF is intrinsically linked to the Greater Manchester Combined Authority and Transport for Greater Manchester, so who better to invest and help plan infrastructure, who better to help guide the future of housing in GM.
An alternative method to building, is Pension Funds setting up shared ownership vehicles, Lancashire County Pension Fund did this (also) in 2014. Setting up Heylo which purchased housing stock and offered shared-ownership or affordable rentals — a £300 million investment.
There are other pension funds investing too, generally in private rent sectors for higher rewards. These are less about the ‘social good’ aspect of the two I’ve spoken about, and less about affordable homes in reality.
What the future holds…
It’s great to see pension funds stepping up and filling the gap from investors in the building market — and doing social good at the same time. It’s a shame that the gov’t isn’t incensing this more and it isn’t asking for other funds to do the same, it’s a natural return and a natural resource to invest — pension funds investing local is natural and it just works.
As long as the return is there it works for everyone, and investing in the local economy is amazing — the rewards aren’t just there for the pension fund but local businesses and local residents again and again.
Local builders, employing local people, who shop locally and spend locally, those shops who also employ local people and do the same… those new homes bring in more people who pay more council tax, but also spend locally and work locally (hopefully) … its win win win — and the pension funds get paid back too don’t forget. Pension Funds are the natural investors, they should be investing more!