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 land owners 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.”

He added: “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.

“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.”

Savills will source the funding and manage the interests of the other equity participants.