LETCHWORTH GARDEN CITY: Willmott Dixon is setting up a new business to build and own private rented housing.
The private builder has launched a joint venture with property adviser Savills and plans to develop a national portfolio of private rented housing.
The decision to move into private build-to-let housing creates a whole new asset business for the builder and ends a long tradition at the company of focusing solely on social housing.
Willmott Dixon and Savills aim to set up a series of regional partnerships with councils and other public sector landowners who would provide the land for a long-term stake in the private rental development.
Negotiations are at an early stage but the partners are understood to be working on a scheme in the Midlands to pioneer the model originally developed by Savills.
Their business is aimed at the growing number of 'in-betweeners', often skilled people between the ages of 25-35 years who are excluded from home ownership yet ineligible for social housing.
Andrew Telfer, chief executive officer of Willmott Dixon Regeneration, said: "Following last year's Comprehensive Spending Review, we needed to respond with innovative funding mechanisms to develop new housing that does not rely on housing grant or subsidy.
"We believe we have developed an exciting and unique model that will create a fundamental shift in the UK housing market."
