Construction group Galliford Try and developer Wiggins have formed a joint-venture company to develop a former hospital site in Letchworth, Bedfordshire.
The company, Fairfield Redevelopments, has bought 18 ha of the 28 ha site from Wiggins for £14.7m. The site, formerly Fairfield hospital, has planning permission for 853 units, including 101 in the 19th-century grade II-listed hospital building.

The building and 15 ha of the development are under contract to be sold to a number of housebuilders, including Galliford Try subsidiary Stamford Homes, as the services and infrastructure are completed. Stamford Homes will also act as project manager.

As part of the deal, Wiggins will keep £2m of deposits already paid for units in the area. The development is expected to be sold for £45m when completed in 2007. Construction on the first stage is expected to start next year.

Galliford Try and Wiggins are each providing £2.25m for the joint venture, with the rest of the £14.7m coming from the Royal Bank of Scotland as a loan.