Kingston Council is set to put aside £23 million to buy properties for homeless people to slash the number of families being placed in hotels. The homes will be used as temporary accommodation for homeless families, as the stretched authority revealed it is receiving on average 50 more housing applications every month compared to March last year.

A new report by council officers said homelessness levels and demand for temporary accommodation has 'reached a point of crisis' in Kingston, with nearly 1,000 families in temporary housing. This has pushed the council to put together a strategy to buy more temporary homes to cope with the rising demand on its services.

The report recommends the corporate and resources committee approves a budget of £23.4m – £9.8m in 2024/25 and £13.6m in 2025/26 – to buy around 50 homes by March 2026 to be used as temporary accommodation. The authority plans to apply for grants from the Greater London Authority (GLA) to support these costs.

It also recommends the council investigate setting up a company, that it would own, to buy around 150 more homes to move families out of temporary accommodation. These properties would be offered to people under shorthold assured tenancies at rents set to the local housing allowance rate, which determines the maximum support available for private renters. These plans would need further sign-off before going ahead, with a report expected in autumn.

It comes as the number of homes the council leases from private landlords, to be used as temporary accommodation, falls as more landlords are selling up. At the same time, the report said, more families are being evicted or finding themselves unable to afford spiralling rents. The authority now receives an average of 80 housing applications from homeless people each month, compared to 30 in March last year.

This has left the council heavily reliant on placing homeless people in hotels or B&Bs, according to the report, which cost more to book. The authority overspent on temporary accommodation by £5.8m in 2023/24, and spent a net total of more than £9.3m.

The council previously responded to a Freedom of Information request, submitted by the Local Democracy Reporting Service (LDRS), which revealed it has placed increasing numbers of families with kids in B&B or hotel accommodation in recent years – from zero in the 2018/19 financial year to 24 in 2021/22, 88 in 2022/23 and 151 in 2023/24. Families who left B&B or hotel accommodation in 2019/20 had spent an average of 24 days there, while this rose to 227 days – more than seven months – in 2022/23 and fell to 52 days in 2023/24.

The report said the council's proposed strategy to buy around 200 homes, in total, could save it roughly £3m a year. It added: "The proposed recommendation will secure more suitable accommodation and provide a more sustainable alternative for local people in need of temporary accommodation.

"It will deliver better outcomes for households and particularly those with children by improving their quality of life until they can move to more suitable accommodation. It will also reduce dependency on expensive nightly paid accommodation, thereby reducing pressure on the council's housing budget."

The committee will make a final decision on the recommendations on 23 July.