Kingston Council has abandoned plans to create a special purpose vehicle (SPV) to purchase 150 homes for permanent rental to families on its housing register, after determining the proposal was not commercially viable. The council will instead use the properties as temporary accommodation for homeless households.
Original Plan and Financial Hurdles
The council had agreed last year to buy 150 properties for £63.1 million and lease them to a newly created company at £975 per month. The company would then rent the homes to tenants at local housing allowance rates, with the first properties expected to be let this spring. This would have allowed the council to discharge its housing duty to those families, removing them from the waiting list.
However, a new officer report cited national economic changes and revised modelling showing the company would not be viable, with predicted rental income lower than previously forecast. Matthew Essex, Executive Director of Place, told the council's Corporate and Resources Committee on June 25 it was a "shame" the company was not commercially viable, as the authority had hoped to discharge its housing duty through the scheme.
Shift to Temporary Accommodation
The council will now use the 150 properties as temporary accommodation, with acquisitions and family moves expected to begin this financial year. The report states this will not allow the council to discharge its housing duty, as local authorities cannot grant periodic tenancies, but "would still provide stable and sustainable housing for homeless households at an affordable rent."
The move is intended to reduce reliance on expensive emergency accommodation such as hotels, as the council faces rapidly rising demand and costs. Housing applications surged from 30 per month in March 2023 to 80 per month in March 2025. More than 1,000 households were in temporary accommodation as of March 2025, pushing net costs from £9.3 million in 2023/24 to an expected £12.1 million in 2025/26.
Acquisitions Strategy and Political Reaction
The council approved a temporary accommodation acquisitions strategy in July 2024, which has already added over 100 homes to its stock. The 150 properties will supplement this. Matthew Essex noted that keeping the properties as temporary accommodation is more straightforward and improves transparency, as there is no separate company structure. He added that residents will remain high priority for permanent council housing.
Lib Dem councillor Cllr Mark Durrant said he was "not particularly bothered about how it is done, as long as it is done," and described emergency accommodation as a "worse solution for families" who had fallen onto hard times and needed help from the council.
