TEMPORARY ACCOMMODATION CRISIS Tackling the temporary accommodation crisis

Hannah Velani Kim Grievson

Kim is a Principal in the Place team at Avison Young. She has a national remit focused on unlocking complex development and regeneration opportunities which help to drive economic growth. Hannah also works within the PLACE team. Kim is currently working with a number of local authorities to consider how they can better utilise their assets to tackle this issue and Hannah successfully obtained planning consent for the Wates and Havering JV at Waterloo Road for nearly 1,300 homes, as well as a temporary modular housing scheme. Alongside Wates Residential, Hannah is also exploring further opportunities to deliver similar modular housing developments across London in 2026, and as part of a wider consortium of consultants and with Wates Residential, Hannah is also championing the use of Permitted Development rights to facilitate the rapid delivery of temporary housing.

In line with Alan and Melvyn’s stark statistics, Kim and Hannah add their own. They identify some schemes to help alleviate the crisis, which could be rolled out elsewhere, and some necessary solutions.

It was reported in September 2025 that council spending on temporary accommodation within England has soared by 25% year on year to £2.8bn p.a. Analysis of the figures from housing charity Shelter reveals that: 

• The total amount councils spent on temporary accommodation has more than doubled in the last five years 

• One third of the total was spent on emergency B&Bs and hostels; and 

• 40% of the total; over £1bn was spent on nightly paid, self-contained accommodation. 

This is a significant burden for local councils, many of whom are feeling the wider pressures of mounting day to day running costs. The Local Government Association has highlighted the imbalance between the current housing benefit reimbursement rules for temporary accommodation, which means that councils are responsible for paying private landlords ‘market facing’ rental levels, while the levels they are reimbursed are linked to 2011 rental levels, resulting in a significant shortfall they need to pick up at a local level. 

The issues with the current temporary accommodation system are not just felt by councils in financial terms; the problems are far more wide ranging. The current system is heavily reliant on temporary solutions within the private sector, which include B&Bs/room only/hostel and hotel options due to a lack of supply. These are not fit for purpose and have significant wider social impacts for those housed there. 

In January 2025 the All Party Parliamentary Group for Households in Temporary Accommodation reported that children in temporary accommodation were at greater risk of ill health and child mortality, with broader issues around education, mental health and wellbeing also cited. These issues are compounded where councils are forced to consider ‘out of borough’ solutions which can lead to isolation and a lack of support networks. This issue is particularly prevalent across London, where the daily cost of temporary accommodation is calculated to be c£5.5m per day and boroughs are often forced by financial constraints to house individuals significant distances away. 

While the issue is clearly headline grabbing and the source of much political debate, with the government’s recent publication of ‘A National Plan to End Homelessness’ (December 2025), it is clear that the column inches need to give way to some demonstrable actions. There is already evidence of some successful initiatives within this space which will hopefully pave the way for the much needed wide scale change. 

Some homelessness case studies 

Notable UK wide examples include: 

Embassy Village – a project jointly delivered by charity Embassy and developers Capital and Centric which will provide 40 purpose built ‘studio’ apartments under railway arches in central Manchester, provided on a short/medium term basis with wrap around support on life skills, budgeting and interview skills. 

Havering Council and Wates JV – The partnership is delivering 18 temporary modular homes as part of a long-term estate regeneration project. The solution focuses on a modular housing system which has been developed with a life span of 60 years, can be built and deployed in c70 days, and can then be flexibly relocated as housing need evolves. Wates has aspirations to deploy this approach across a wide range of sites. 

Bristol City Council – a 7-year licence has been granted to developer MMC across four unused parcels of land where the developer has funded, manufactured and installed 6x ‘eco pods’ across each site. These homes are then leased back to the council and utilised to support temporary housing need. A key focus on these pods is their high energy efficiency to reduce energy costs for residents. 

Solutions 

The need for a ‘two pronged’ attack is clear; systemic long-term changes which tackle the root causes, and also immediate actions which help those currently in need and reduce the financial burden on councils who are increasingly reliant on unfit private sector solutions to deal with the crisis.

In the long term: 

• Supply – Labour has pledged a £39bn spend on affordable housing over the next decade, which if deployed successfully should increase the supply of fit for purpose housing to support those in need. Shelter estimates that c90,000 social rented homes are required to be delivered annually to tackle the current crisis, but it is clear that this figure is mounting, with targets missed for all forms of housebuilding across the UK in 2025 

• Tackle the root cause – provide more support for individuals before they become ‘homeless’, looking at easing the social and economic pressures causing people to lose their homes in the first place 

• Structural change – The Renters Rights Act will come into force in May 2026, which will put an end to ‘no fault evictions’ and discrimination against those in receipt of benefits or with children. It is imperative that this is strictly managed and endorsed so existing renters feel the benefits. 

• In the immediate: 

• Fit for purpose housing – accelerate the delivery of homes specifically designed for ‘temporary accommodation purposes’, which reflect the immediate housing needs and reduce reliance upon hotels/B&Bs etc 

• Speeding up the planning process – give consideration to powers which would enable councils to fast track applications to deliver designated temporary accommodations, or consider how permitted development rights could be expanded to include this 

• Take a pragmatic approach to procurement – consider how existing frameworks and direct awards may be utilised over complex and laborious procurement processes, utilising the high cost of private hotel/hostel provision on a daily basis as the justification for a swift process 

• Think creatively about your property assets – how can your existing asset base be utilised more effectively to solve this crisis.