Kingston Council will borrow £63.1million to buy 150 homes to move families out of temporary accommodation.

The council said the scheme aims to slash its dependence on placing homeless people in expensive emergency accommodation, including hotels, and will include buying back homes it sold through Right to Buy.

A report by council officers said the authority urgently needs to expand its housing supply and reduce its reliance on expensive emergency accommodation, as it grapples with rapidly rising demand and costs.

It said the situation has been made worse by limited affordable housing stock and the UK's volatile private rental market.

Housing applications to the council rose from 30 a month in March 2023 to 80 a month in March 2025. More than 1,000 households were in temporary accommodation in the same month, pushing net costs from £9.3m in 2023/24 to an expected £12.1m in 2025/26.

The council approved a temporary accommodation acquisitions strategy in July 2024, which outlined proposals to buy property to help residents in need of such housing.

The strategy involved plans to buy 50 homes to be used as temporary accommodation, which it expects to have completed by the end of the year at a cost of roughly £20m.

The council's Corporate and Resources Committee approved plans on Thursday (November 27) to next set up a special purpose vehicle – a company created for an individual project – to buy 150 more homes to rent out to residents.

This will allow it to discharge its housing duty to these residents, so they are no longer on the waiting list.

The scheme will see the council borrow funds from the Public Works Loan Board, a government body, to buy and bring up to standard 150 homes. The authority will lease these homes to the company at £975 each a month.

The company will then lease these homes to tenants at rents set to the local housing allowance rate, which determines the maximum support available for renters.

The report said the model is set to become financially viable by the second year, with rental income covering costs. The council expects to avoid spending £278m over 40 years through the scheme, compared to current approaches, which officers equated to a £47m net present value.

Matthew Essex, the council's executive director of place, said people "going into these homes will no longer be classed as homeless, they will be back in the private sector, where the overwhelming majority of them came from, on a sustainable tenancy".

He added: "It's not without risk, I think, but the fact that it is a very tightly-drawn company, dealing in properties that already exist, and it will be able to touch on day one, after they've been acquired and leased over to it, does mitigate for me, I think, the biggest incoming risk."

The committee approved the plans at the meeting, with nine councillors voting in favour and one abstention.

The council aims to set up the company in January and begin buying properties, with a target of renting out the first homes by spring next year.