London borough’s temporary accommodation costs have increased 35% in less than two years due to B&B usage

A London borough has decided to press ahead with a plan to form a joint venture (JV) with Mears to buy 400 homes in a bid to ease rising temporary accommodation costs.

waltham forest council

Waltham Forest town hall, Walthamstow, east London (picture: Shutterstock)

Under the plan approved by leading Waltham Forest councillors yesterday, the JV will raise funding via a bond issue to acquire the homes, which will be let to households currently living in temporary accommodation.

The council will have nomination rights to the homes, while Mears will provide repairs and maintenance services through its registered provider subsidiary Plexus. The council will repurchase the homes from the JV after 40 years.

A cabinet report said the net cost of providing temporary accommodation had increased 35% from £85 to £131 per week per property. This is because the council has been increasingly using B&Bs and hotels to house people due to a shortage of available PRS properties. 

It said: “Further, due to the lack of affordable housing and affordable housing options in the PRS, households are staying in temporary accommodation for much longer, creating uncertainty and challenges for residents and additional financial pressure for the council.”

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It said the number of households in the borough living in temporary accommodation had increased from 831 in June 2022 to 891 in May 2023.

The report said: “The Mears partnership will help alleviate the pressure on the demand for temporary accommodation by providing a supply of homes at scale.

”As properties are acquired via the Mears partnership, they will be offered to households living in temporary accommodation to discharge the main housing duty.”

How the deal will work

  • The joint venture with Mears will raise funding via a bond issue to acquire 400 homes (either freehold or leasehold) from the market to be held by the joint venture and let.
  • The council will have one hundred percent tenant nomination rights, and an obligation to pay rent if homes are unoccupied and if there is rent income shortfall, under a guarantee.
  • Mears will provide housing management and repairs & maintenance services through its registered provider subsidiary Plexus.
  • After 40 years, the council will purchase the properties from the JV at a value equivalent to any outstanding debt.

The JV will aim for half of the homes to be within London boroughs, with properties outside the capital to be within 15 minutes walking distance of public transport connections into London. It is aiming for 60% of the homes to be two-bedroom and 40% three-bedroom.

Councillors initially approved the joint venture in September 2022, but this was later suspended due to ”ongoing adverse market conditions”.

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