Councils seek ‘holy grail’ of pension fund investment in temporary accommodation

She continued: “Across London, everyone’s trying. And partly it is this stability – what are rents going to be over the next several years – that will give pension funds the confidence in order to invest.”

Investment in the homelessness accommodation space has taken a reputational hit over the past few years after the high-profile failure of Home REIT, an investment trust that is now in the process of winding down.

Ms Campbell, who is also vice-chair of the Conservative group at London Councils, called the temporary accommodation spending crisis “an existential threat for some of our councils”.

Kensington and Chelsea went over budget by £4m last year due to spending on temporary accommodation, but she said “that’s nothing compared to some of my colleagues”.

“We’re spending all this money, and it isn’t getting us any good-quality housing,” she continued. “It’s getting us things that we’re not proud of – rodent-ridden, leaky, damp properties.”

“It’s councils pouring billions of pounds into the pockets of landlords of not great properties and people who own cheap hotels.

“Never has so much money been spent and produced such terrible, terrible outcomes,” she added.

She said that Kensington and Chelsea had lowered the number of people going into temporary accommodation by changing its council housing allocation scheme to keep people on the housing register if they took a home in the private rented sector.

“What we said to people is rather than go into temporary accommodation, go into private rental. The subsidy from government is higher… and we will keep you on the housing register and give you additional points. It works for everyone,” she said.

Fellow panellist Naomi Morris, senior manager at Birmingham City Council, said the supported exempt accommodation sector was “massive” in the city. There are around 26,000 units of supported exempt accommodation in Birmingham, predominantly housing single and vulnerable people.

“We are working with providers to flip that into family accommodation, use it as temporary accommodation. We can be more assured around the support,” she said.

She added that the council was taking whole hotels and converting them into “24/7 staffed homeless centres” to reduce cost and improve the quality of support for residents.

Sophie Boobis, head of policy and research at Homeless Link, said that the number of evictions from social housing into homelessness “has been going up and up” over the past few years, which is “very worrying”.

She encouraged councils and housing associations to commit not to evict their tenants from social housing and do more work to understand why their tenants were falling into arrears. “We need to do everything we possibly can to avoid eviction,” she added.

Rory Lowings, Solohaus project manager at house builder Hill Group, works with councils to find sites for move-on housing for people leaving temporary accommodation.

He said there is “often an assumption that people who get into temporary accommodation are in some way disreputable”.

“When I deal with local authorities… they really struggle to find sites that they believe to be appropriate, when you know for a fact that they have them,” he added.