New report shows Mayor’s plans to acquire 10,000 new council homes will slash boroughs’ temporary accommodation costs by £1.5bn

• New report from the New Economics Foundation shows Mayor’s trailblazing Council Homes Acquisition Programme (CHAP) could deliver billions of pounds worth of savings over next two decades
• Enabling councils to purchase 10,000 affordable homes is set to save boroughs £1.5bn on temporary accommodation costs, with additional savings of £780m to central Government in next two decades
• Mayor committed to tackling the capital’s housing crisis, ending homelessness and easing London councils’ budget constraints

London boroughs and central Government will be saved billions of pounds over the next two decades by the Mayor Sadiq Khan’s landmark scheme to buy much-needed council homes, a new report revealed today. [1]

The Mayor’s Council Homes Acquisition Programme (CHAP), which he launched last November, sets an ambition for local authorities to purchase 10,000 new council homes from the private market in the next decade, responding to Londoners’ urgent need for social housing and temporary accommodation.

New independent research published today by the New Economics Foundation shows that the Mayor’s CHAP scheme will reduce London councils’ temporary accommodation costs by £1.5bn, trim housing benefit subsidies by £340m and generate an additional £440m in savings to central Government – totalling £2.2bn slashed in expenditure over the next two decades.

CHAP is one of several policy interventions by the Mayor to increase the supply of council housing across London. Today’s report found that the Mayor’s council housing acquisition funds – including his Right to Buy-back scheme which saw over 1,200 homes acquired by councils between July 2021 and March 2023 – are an essential part of the package of solutions required to end the capital’s housing crisis.

The need for new council homes has never been greater, with London boroughs grappling with the financial and social costs of a ballooning homelessness and housing crisis. Thousands of Londoners are currently living in insecure temporary housing, with many families stuck in unsuitable bed and breakfast accommodation. According to London Councils data, over 70,000 children in London are living in temporary accommodation. [2]

This is putting a huge strain on already stretched council finances, with many local authorities forced to place struggling families in expensive and often sub-par temporary accommodation due to the lack of social and genuinely affordable homes in the capital. 

The Mayor of London, Sadiq Khan, said: “With homelessness on the rise and housebuilding on the decline nationally, today’s report shows the vital importance of my Council Homes Acquisition Programme to solving the capital’s housing crisis.

“By converting private housing into 10,000 new council homes, not only will councils save £1.5bn in temporary accommodation costs – significantly easing the constraints on council finances – but central Government spending will also be slashed by a staggering £780m over the next two decades. This programme works, and Government should back me to deliver it in full.

“This scheme will enable us to work with local authorities and the Government to deliver the investment that is needed to get housebuilding in the capital back on track and ease cost-of-living pressures on households – helping to build a better, fairer, more prosperous London for all.”

Sadiq is committed to tackling the capital’s housing crisis and ending the cycle of homelessness for thousands of Londoners. Under the Mayor’s leadership and thanks to the efforts of boroughs, London has entered a golden era of council housebuilding. Since 2018, more than 23,000 council homes have been built – or are being built – with the help of City Hall funding. London has completed more homes of all types in recent years than at any time since the 1930s and delivered higher council homebuilding than at any time since the 1970s – more than twice as many as the rest of the country combined.

The Mayor has also delivered record funding to homelessness charities and service providers across the capital, and drastically increased City Hall’s rough sleeping budget. At £36.3million, the budget in 2023/24 is now more than four times the £8.45million a year it was when Sadiq took office in 2016.

However, housing experts have warned of a major decline in housebuilding across the country, driven by high interest rates, building cost inflation and a lack of leadership from the Government. To safeguard the supply of new genuinely affordable and social homes, the Mayor has called for additional emergency funding of at least £2.2 billion from the Government to boost London’s affordable housing delivery and an increase in affordable housing investment to an average of £4.9bn.

ENDS