An arm’s-length management organisation (ALMO) will become the first to set up a commercial subsidiary to build homes for market rent.
According to Inside Housing:
Nottingham City Homes plans to invest an initial £10m from its own reserves and from Nottingham City Council’s general fund to build 22 new homes and to buy others that are on the market.
Its new for-profit private rent company will be called Living, and it aims to improve the standard of private rented property in Nottingham. The properties will have a range of finishes, from average specification with basic furniture, to high-end properties in the city centre. The subsidiary will not charge administrative fees to tenants and will offer flexible one to three-year tenancies.
The ALMO hopes the market rent will generate a good return on investment and it aims to grow Living over the next three years, with a possible £25m investment in homes for market sale and rent. Inside Housing asked what return on investment the ALMO is expecting, but a spokesperson said this was not yet clear.
The investment will primarily come from Nottingham City Council but Jonathan Shaw, director of investment and business services at Nottingham City Homes, said this “could change in the future”.