In a bold move to tackle its growing housing crisis, Kingston Council has approved plans to borrow £63.1 million to purchase 150 homes for families stuck on its waiting list. The initiative is designed to drastically reduce the South London authority's reliance on costly temporary accommodation, such as hotels, which has seen its net costs soar.
A Response to Soaring Demand and Costs
The council's decision comes as it grapples with a rapid increase in housing need. Official reports show that housing applications to the council jumped from just 30 per month in March 2023 to 80 per month in March 2025. During the same period, more than 1,000 households were living in temporary accommodation, pushing the net costs from £9.3 million in 2023/24 to an expected £12.1 million in 2025/26.
Matthew Essex, the council's Executive Director of Place, stated that the scheme aims to provide sustainable tenancies. "People going into these homes will no longer be classed as homeless," he said, adding they would be back in the private sector on a stable footing.
The Financial Mechanics of the Plan
The funding for this ambitious project will be borrowed from the Public Works Loan Board, a government body. The council will then establish a special purpose vehicle—a company created solely for this project—to purchase and manage the 150 properties.
The operational model involves the council leasing the homes to this company for £975 per month each. The company will then rent them out to tenants at the Local Housing Allowance rate, which sets the maximum housing support available. Crucially, the model is projected to become financially viable by its second year, with rental income covering all costs.
Long-Term Benefits and Risk Mitigation
This strategy is expected to yield significant long-term savings for the council. A report by council officers estimates the authority will avoid spending £278 million over 40 years compared to current approaches, equating to a net present value of £47 million.
While acknowledging the plan is "not without risk," Mr. Essex highlighted that the risks are mitigated because the company will deal with existing properties that can be utilised immediately after acquisition. The council's Corporate and Resources Committee approved the plans on November 27, with nine councillors voting in favour and one abstention.
The council aims to set up the company in January and begin purchasing properties shortly after, with the goal of renting out the first homes by spring next year.
