The Borough as Landlord: Reading the Fine Print of London’s Temporary-Accommodation Build-Out

The temporary accommodation bill is one of the clearest measures of London’s housing stress. It is also one of the easiest figures for a council to present as a case for direct action. In 2026, boroughs across the capital are buying existing homes, commissioning new build and using wholly owned companies to secure supply that would otherwise be sourced from private landlords, B&Bs and nightly-paid hotels. The political argument is straightforward: if the council is the landlord, it can control cost, standards and security. The financial argument is less straightforward.

Why the bill keeps moving

Temporary accommodation is not a single budget line. Councils place homeless households in several types of provision, from self-contained private rented flats to shared accommodation and emergency hotels. The cost depends on the rent charged, the length of stay, the availability of subsidy and the council’s statutory duties. When private rents rise or landlords leave the sector, councils pay more or place households further from home. When a council buys or builds, it takes on debt, management costs, maintenance and void risk. The question is whether the new supply reduces the net cost to the public purse or simply shifts pressure between accounts.

That is why the Housing Revenue Account matters. The HRA is a ring-fenced account for council housing. It can support new build and acquisitions, but it cannot be treated as a general fund for every homelessness cost. Temporary accommodation is often funded through the General Fund, with housing benefit subsidy and council contributions. A scheme that looks cheaper in the HRA may not look cheaper in the General Fund, and vice versa. Residents and scrutiny committees should ask which account is bearing the cost, which account receives the rent, and how the two are kept transparent.

Three routes, three different tests

The first route is direct council housebuilding within the HRA. This can deliver homes at social rent or London Affordable Rent, with secure tenancies and council management. It is the strongest route for long-term affordability, but it is slow and constrained by borrowing capacity, land and grant. The second is acquisition by a wholly owned local housing company. These companies can move faster and may borrow differently, but their rent-setting and lettings policies need scrutiny. A company that lets at market rent may ease pressure on the General Fund without providing the same security as a council tenancy. The third is block purchase or leasing from private landlords. It is quick, but it can lock the council into paying for standards it does not control.

The test is not whether a scheme is labelled ‘council housing’. The test is what it delivers per pound of public money: how many homes, at what rent, for how long, with what security, and at what net cost after debt, management, maintenance and voids. A borough that buys 50 homes at market rent may reduce hotel use, but it may not reduce the overall bill if the rent is high and the tenancies are short. A borough that builds 30 homes at social rent may take longer, but it may produce a better long-term settlement.

What tenants actually get

For a homeless household, the difference between a temporary accommodation placement and a settled home is not administrative. It affects schooling, health, employment and the ability to complain. A council-owned unit may offer better standards and a clearer repairs route. It may also offer a tenancy rather than a licence, which brings greater security. But not every council scheme delivers that. Some temporary accommodation is intentionally short-term. Some local housing company homes are let at affordable rent rather than social rent. Some units are acquired outside the borough, which can weaken local connection and support networks.

Residents should therefore ask not only ‘is the council building?’ but ‘what tenure will I have, what rent will I pay, and what happens when the temporary accommodation duty ends?’ If a household is placed in a council-owned unit, can it stay if its circumstances change? Is the unit part of the council’s general needs stock or a dedicated temporary accommodation scheme? These details determine whether the scheme is a stepping stone or a short-term fix with a longer-term cost.

Questions residents should put to councils

• Which route is this scheme using: HRA new build, local housing company, or private acquisition?
• Which account pays for the scheme, and which account receives the rent?
• What rent level applies: social rent, London Affordable Rent, affordable rent or market rent?
• What tenure will occupiers have: secure tenancy, flexible tenancy, licence or temporary accommodation agreement?
• How does the scheme compare in net cost with private leasing and hotel use?
• What borrowing assumption underpins the business case, and what happens if rents or interest rates change?
• How many homes are for temporary accommodation and how many for general needs?
• What local connection and lettings policy applies?
• What standards apply for repairs, fire safety, accessibility and overcrowding?
• How will the council report voids, arrears, complaints and placement outcomes?
• What happens to residents when a temporary accommodation duty ends?

The accountability gap

Direct housebuilding can be a credible response to the temporary accommodation crisis. It can also become a way of moving costs into less visible accounts. The difference lies in transparency. Councils should publish the assumptions behind local housing company plans, the rent levels they expect to charge and the outcomes for households, not only the number of units acquired. Residents and community groups should ask for those figures in public scrutiny meetings and in responses to consultations.

The borough as landlord is not automatically a better landlord. It is a different landlord, with different incentives and different risks. In 2026, the right question is not whether councils are building, but whether the homes they build and buy are affordable, secure and accountable to the people who need them.