Birds enjoy many different types of natural habitat - from open nests, to holes in trees. Sadly many of the natural homes for birds are being destroyed, especially in urban areas, and birds are vacating the town as they search for new homes. If you are interested in attracting birds back into the home garden then you need to think about constructing a home for the bird.
First you need to know what sorts of birds are in the area and which ones may be attracted to a house you make. Different birds have different needs, and generally their size will determine what sort of dwelling might be suitable. You should try to match the bird house constructed as closely as possible to natural homes, so research what birds you have, their sizes and their natural dwelling preferences.
Secondly, a birdhouse needs to provide security and shelter. The house will have a single entrance and exit - generally a hole just big enough for the bird - and will have that hole sheltered by a roof to prevent rainwater wetting the inside if it is driven by wind. Make sure there are no perches for predators to use near the entrance, or that the roof doesn't function as a step for some other animal to invade from above. Ventilation holes in the floor and side will help keep the shelter healthy.
Bark is an excellent material for actual construction since it is natural and can be easily obtained from fallen tree limbs, or those trees that naturally shed pieces of bark as they mature. Being natural there will be no harmful chemicals leaching into the bird dwelling. And the bird is more likely to investigate a bark dwelling than one made of some foreign material.
Bark can be used in two main ways. Small pieces can form a cladding for part of all the bird house being stapled or nailed onto an underlying wooden frame. Larger pieces can form the main structural pieces such as walls, floors or roofs being secured to other pieces of bark or a wooden frame.
One simple design for a bird house suitable for very small, light birds is large piece of bark wrapped into a cylinder to form the walls of the house. The bark can be stapled together. It will be necessary to cut a hole in the bark just big enough for the bird and also make smaller holes for the ventilation. The cylinder can be sandwiched between an open box wooden frame with a simple flat top and bottom. Secure string to the wooden frame so the bark house can be hung anywhere.
"How to make your own birdhouse", http://www.gardenplansireland.com/forum/about599.html
"Practical birdhouse designs revealed",http://www.squidoo.com/practical-birdhouse-designs-revealed