Havering Council housing plan to reduce hotel ‘over-reliance’

Cabinet members approved plans to reduce Havering’s “over-reliance” on the private sector and hotels when housing homeless families.

Havering Council has revealed a proposal that it says will enable it to replace its existing private sector leases with a new arrangement.

Under the plans – known as the Private Property Acquisition Programme (PPAP) – a real estate investment trust (REIT) would buy up to 150 residential units from the open market and renovate them up to a “letting standard” at “no upfront cost to the council”.

The council, an authority report says, would sign a contract with the REIT to lease these properties on an individual basis for 10 years.

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It would then “underlet” these out to households in need through the council’s housing company, Mercury Land Holdings.

The report said the authority now has “an over-reliance” on private sector accommodation and hotels.

One of the scheme’s aims is to enable it to move families out of hotels.

The Recorder reported in January that the council had already spent more than £500,000 on emergency hotel and bed and breakfast accommodation in the financial year to-date.

The programme was discussed at a cabinet meeting last week where it was given the green light by all members.

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Councillor Paul McGeary, cabinet member for housing, said while presenting the report that the housing market is currently “in a crisis”, probably the “worst in the past 30 years”.

Private landlords, he said, are selling their properties and moving out of the sector as the rising interest rates have made the mortgages costlier.

He added that this has resulted in a “massive demand from homeless families evicted by their landlords” and the council is “unable to prevent their homelessness” by finding accommodation in the private rental sector like it used to.

To meet this demand, he said the council has had to use hotels for the first time.

He claimed: “This is a crisis facing Havering and all of London.”

The report said that previously the council could secure an average of 400 properties a year through its rent deposit scheme, but it has to now occupy hotels “for the first time in six years” with “170 families and singles in hotels” at premium rates.

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The number of homeless approaches to the council has risen sharply, it revealed, has gone up from 2,032 in 2019-2020, to 3152 in 2022-23. The council’s responsibility to house them means it needs more temporary accommodation.

The proposed scheme would save the authority more than £7m over ten years when compared with continuing to lease from the private sector, the report said.

Councillor Gillian Ford hailed the plan as a “positive step” and said: “The private sector leasing is absolutely changing, and this will take us into a more secure environment so that we are in control of these properties ourselves.”

Councillor Keith Prince, leader of the Tory group in Havering, added that they “principally agree” with the need for such a programme.

More details on the implementation of the scheme are expected to follow in the coming months.