An innovative house-building scheme has today taken a major step forward as the city council submitted the planning application for its first purpose-built private rented sector residential scheme.
Named Embankment, the scheme aims to set a new standard for private rented accommodation and encourage other providers to follow suit.
A wholly-owned company has already been set up following cabinet approval in December 2014, which will develop the site at St Vincent Street in the city centre.
Councillor Tahir Ali, cabinet member for development, transport and the economy, said: “Birmingham City Council already has an impressive track-record as a provider of new homes, both for rent and sale, through the Birmingham Municipal Housing Trust. In partnership with developers, we have built 650 new homes for rent, 550 for sale, and another 1,000 are under construction.
“This new scheme will not replace the development of new homes through BMHT, but will complement it by offering an alternative tenure option, without diverting resources away from the existing programme of developing social rented homes. This is about creating an additional way for the council to facilitate new homes in Birmingham.
“The private rented sector is becoming the choice for an increasing number of people, but developers are not yet translating interest into investment within this area. In leading the way with this initiative, the council is not just responding to the demand for rented homes at market price, but setting the standard for quality too.
“This should send a clear message to the market: if the city council can do it then so can other housing developers. There is a real shortage of high quality housing in the city centre and I expect other providers and investors to take up the challenge and build more new private rented sector homes there; the opportunities have never been greater.”
The scheme supports the Birmingham Development Plan which sets out the need to provide at least 80,000 new homes by 2031, and it is anticipated that some 62 per cent of these will be in the private sector.
If planning permission is approved, the wholly-owned company will develop and retain ownership of the 92 apartments. While market testing indicates there is a sustained demand at this location, the site is not suitable for traditional family housing.
Commercial risks to the council have been tested and sufficient revenue will be generated from rental to meet the scheme costs.
Embankment will be developed through INREACH, a company set up specifically to develop new homes for market rent within the city. The project is based on a sound business plan which makes robust assumptions in respect of the initial and ongoing costs of the scheme to ensure that it will remain financially viable in the longer term, with any surplus generated to invested back into other council priorities.