New model could deliver 1,500 new homes

The PRSI aims to provide private and intermediate rented homes on both private and public sector land. This project will complement existing approaches such as Birmingham Municipal Housing Trust to facilitate the development of new homes of mixed tenure despite the challenging conditions of the current housing market
 
This initiative seeks to bring together public and private sector land with significant equity investment from private sector partners to create a vehicle to develop large numbers of new homes which will make a significant contribution towards meeting the city’s housing growth targets.

The PRSI model will see the council invest its land as a resource into a Joint Venture (JV) in return for an equity stake in the Joint Venture. Funding for the development of new homes would be provided by other partners, together with debt finance to be funded from future income streams from the properties to be built.

Using this approach gives the council the benefit of maximising the value of its land that would otherwise stand undeveloped, and the ability to influence the nature and shape of the future housing market.

The scheme offers the opportunity to provide a high quality residential offer for the rented market, catering for the growing number of aspirational households in the city.

Households renting the new private rented sector homes will have the opportunity to purchase them in due course, further adding to the supply of owner-occupied accommodation in the city.

Councillor John Lines, Cabinet Member for Housing said: “It’s clear the housing market has become polarised between social and market homes, and for a large number of younger people it’s almost impossible to get on the housing ladder.

“If you couple that with the fact that in many cases developers are unable to access development finance in a climate where people have a limited opportunity to get a mortgage, it’s clear a new model was needed to meet the needs of our local people.

“This is another innovative approach that the Council has developed – alongside schemes like the new Extra Care Villages and the Birmingham Municipal Housing Trust – to provide hundreds of new homes, on sites across the city for a range of household types and families. Once the full business case is given Cabinet approval it means we can take the next steps to make these proposals a reality.”

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