Birmingham to set up private rented housing vehicle

5/05/10 11:47 am By Richard Heap

Birmingham City Council is next month expected to approve the setting up of a joint venture to encourage a private rented housing sector in the city.

At a council meeting in June, Birmingham is expected to approve the full business case for the initiative. The council wants to set up a joint venture with private sector partners where it provides land for housing development in return for an equity stake in the venture.

Its partners and debt finance would be expected to fund the new homes.

In a report by the cabinet on 22 February – seen by PublicPropertyUK.com – it said the joint venture could develop 1,000-1,500 homes in the Midlands city, for market rent or market sale, over a period of up to five years.

This is a key issue as the council aims to meet the target of 2,875 new homes a year as set out in the government regional spatial strategy for the area.

Birmingham expects to formally set up the joint venture by the end of July 2010. It said preparatory work for planning permission on first schemes for the venture is underway.

Its aim is to start work on the first small group of homes – around 50 homes – by the end of November and complete them by the end of December 2011.

The council expects to hold a stake of less than 50% in the joint venture. In the longer term, it expects to sell its stake in the joint venture to third parties as the economy picks up. The development of the vehicle is expected to cost £50,000.

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