Two major players in the UK property market have today confirmed the launch of a joint venture to develop a national portfolio of private rented housing. Leading international property adviser Savills and Willmott Dixon, the UK’s second largest privately owned construction and development company, plan to operate across England through a series of regional partnerships with local public sector bodies and private sector landowners. The plan is to work with land owners to maximise the value of their land assets and bring forward sites that would otherwise be undeveloped.

Taking forward a concept originally developed by Savills, the partners have developed a business model for the creation, delivery and long-term ownership of private rented housing. In particular, the initiative 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.

Locations are being targeted where there is a clear shortage of good quality rented housing available and the mix of purpose-built houses and apartments will be designed to meet local needs.

Philip Callan, director of consultancy at Savills, said, “Although owner-occupation remains an aspiration for the majority, financial and practical considerations are increasingly delaying home ownership. This is creating a growing demand for, and shortfall of, good quality, well-managed private rented accommodation.

"Our private rented model is designed to provide a new housing option – new purpose built rented housing with the certainty of availability and high quality customer centred management. Our robust business model will offer investors a long-term index-linked income stream, and private and public sector land owners the opportunity to unlock significant value from under-utilised land assets."

This joint initiative between Willmott Dixon and the housing investment team at Savills confirms both companies’ commitment to developing new investment-focused solutions for housing needs. Both parties will hold an interest in each of the partnerships with Savills sourcing the funding and managing the interests of the other equity participants.

Andrew Telfer, chief executive officer of Willmott Dixon Regeneration, said, “Following last year’s Comprehensive Spending Review, which made significant budget cuts to the Communities and Local Government department, 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.”

“We aim to work with a number of public and private sector partners who can join our partnership as members, bringing in their land assets. We hope it becomes an attractive means to provide much needed housing for the skilled young professionals that local authorities want to retain.”

Andrew Telfer continued, “We’ll be able to use the land assets with the development, financial and property skills that our joint venture brings to create a new public private partnership model.”