The Portfolio Holder Decision Meeting of Harrow Council approved the submission of a bid for the acquisition of homes to be held within the Housing Revenue Account. This decision aims to significantly reduce the council's reliance on temporary accommodation and mitigate rising costs associated with nightly rented accommodation.

Acquisition of Homes for the Housing Revenue Account

The council has approved the submission of a bid and purchase for new homes to be held within the Housing Revenue Account (HRA). This decision was made due to a time-sensitive opportunity to secure 140 newly built homes in Harrow that are nearing completion. The acquisition is intended to address the significant increase in temporary accommodation spend over the last two years, driven by a rise in households requiring support and a reduction in the availability of stable, affordable accommodation.

Councillor Paul Osborn, Leader of the Council, noted that the council has experienced a substantial increase in temporary accommodation spend, with a forecast of between 40.5% and 76% increase in costs for the nightly rented model over the next three financial years. This is compounded by rising demand for housing and the increasing cost of private rented accommodation, making it difficult to secure sustainable options. The report highlighted that by September 2025, there were approximately 686 households requiring temporary accommodation, a significant increase from 220 in April 2023. Projections indicate this demand could rise to between 750 and 1050 homes by 2028.

The proposed acquisition will allow the council to offer direct accommodation to individuals and families currently in temporary accommodation, thereby reducing the use of expensive nightly-rated accommodation. The homes will be acquired on a 999-year leasehold interest and will be managed by the council's housing services. The council will also seek funding from the Greater London Authority's (GLA) Affordable Homes Programme (AHP) to offset the purchase cost.

The decision was made to approve the submission of a bid and purchase in accordance with the range set out in confidential Appendix 1 of the officer's report. Furthermore, the Strategic Director for Housing and Regeneration was delegated authority to appoint an agent to support with due diligence on the bid and any subsequent acquisition. Reports will also be submitted to Cabinet and Full Council to note the terms of the bid, business case, and to update the HRA's 5-year capital programme if the bid is successful.

Alternative options considered and rejected included investing in modular housing, entering into long-term leasing agreements, and continuing to rent at high nightly rates. The report indicated that modular housing faced delivery challenges and had minimal revenue benefits, while long-term leasing was deemed too costly. Continuing with the current model was rejected due to escalating costs and uncertainty of provision.

The acquisition is expected to be financed through the HRA, supported by GLA grant funding and prudential borrowing. Financial modelling suggests the acquisition will be viable over a 30-50 year horizon, delivering a positive net revenue. The council will charge social rents in accordance with government standards. The report also noted that the council has a statutory obligation under the Housing Act 1996 to provide suitable accommodation for households at risk of homelessness.