Councils urgently need fast, fit-for-purpose homes to tackle the temporary accommodation crisis

Council spending on temporary accommodation has climbed to £2.8bn a year, more than doubling in five years, with over £1bn now going to nightly paid units and a third spent on emergency B&Bs and hostels. This is a significant burden for local councils, many of whom are feeling the wider pressures of mounting day-to-day running costs.

London spends £5.5m a day on temporary accommodation, and demand is rising fast in the North East and South West. The result is that 11% of the average household’s council tax bill is now being consumed by temporary accommodation, a system never designed to operate at this scale. It’s a national financial burden that touches every household.

“Councils and developers must work together to identify bottlenecks and remove the barriers slowing down delivery”

There’s an unprecedented strain on mental health while people’s lives are on hold, and these issues are compounded when councils are forced to consider ‘out of borough’ solutions, which can lead to isolation from existing support networks. For children, the disruption is even more profound as education is interrupted and constant moves prevent stability.

Councils urgently need fast, flexible, fit-for-purpose homes that can be delivered at pace. Delivering this kind of accommodation at scale is only possible through strong public-private partnerships that unlock land and accelerate the delivery of sites that would otherwise remain stalled.

Labour’s pledge of £39bn for affordable housing over the next decade signals a commitment to increasing supply, but the gap remains vast. Shelter estimates that around 90,000 new social rent homes will be needed each year to meet current demand, and with housebuilding targets missed again in 2025, the shortfall continues to grow.

That makes the immediate priority clear: councils and developers must work together to identify bottlenecks and remove the barriers slowing down delivery. This could include taking a more agile approach to expand permitted development rights, so councils have the power to fast-track applications for designated temporary accommodation.

Given the spiralling cost of nightly hotel and hostel provision, there is a strong financial case for accelerating procurement to secure purpose-built accommodation instead. This may focus on the use of existing frameworks and direct award routes to mitigate lengthy procurement processes.

“Across the UK, there is evidence of partnership-driven initiatives between councils and developers that are showing better long-term use of capital and assets to create accommodation fit for purpose”

Alongside the creation of quality homes, tackling the root causes of housing instability cannot be overlooked. It’s vital to understand why the temporary accommodation crisis is accelerating and to focus on the pressures that leave people with no option but to seek emergency housing. This will help councils operate with a prevention-first approach.

The Renters’ Rights Act abolishes Section 21 ‘no-fault’ evictions and bans discrimination against households with children and people receiving benefits, while raising health and safety standards. Together, these changes aim to reduce the number of households pushed into crisis.

Across the UK, there is evidence of partnership-driven initiatives between councils and developers that are showing better long-term use of capital and assets to create accommodation fit for purpose.

For example, Embassy Village, a project jointly delivered by Embassy and Capital & Centric, is providing 40 purpose-built apartments under railway arches in central Manchester, designed for short to medium-term occupation. It also offers wraparound support on life skills, budgeting and interview skills, showing how accommodation can be more than a space in which to sleep.

The joint venture between Havering Council in east London and Wates Residential provides another great example of innovative thinking. Here, as part of a multi-phase estate regeneration scheme, there are plans for 18 temporary modular homes to be built upon temporarily vacant space. These homes can be built in 70 days and flexibly relocated depending on need and land availability. 

And in Bristol, the city council has provided a seven-year license to developer MMC Homebuilding across four unused parcels of land, where the developer has funded, manufactured and installed six ‘eco pods’ across each site. These homes are leased back to the council and utilised to support temporary housing needs, with a key focus on energy efficiency to reduce costs for residents.

Councils cannot solve this alone. Strengthening partnerships is fundamental to transforming the system from one focused on crisis management to one that prioritises long-term stability for vulnerable people.

The temporary accommodation crisis won’t end overnight. But the only way through it is innovative thinking and alignment across the public and private sectors, turning a system of survival into one of greater stability.

Kim Grieveson, principal, Avison Young