Are there different financial models that could tackle the temporary accommodation crisis?

From the outset, the local authorities on our taskforce wanted to focus on solutions which would allow them to sustainably discharge their homelessness duty.

This didn’t mean just moving people on. It meant providing secure and long-term solutions. The preferred option was to create more local housing supply to be let at Local Housing Allowance rents. This would create a secure tenure, linked to local authorities, which would be affordable because rents would be no more than housing benefit.

“Local authorities are under pressure, often too pressed to consider alternatives, and wary of the risks and costs that accompany transactions”

We looked at how capital was being leveraged into such models, and how this could be expanded. We considered a range of options, across the full spectrum of different ownership and responsibility matrices.

All the options modelled performed better financially than the current reliance on nightly paid accommodation, although they were still not financially sustainable in the longer term. However, we found grant payments would make a material difference, edging some models into being positive in present value terms.

Of course, there is a reason this hasn’t been done at scale already. Local authorities are under pressure, often too pressed to consider alternatives, and wary of the risks and costs that accompany transactions.

We know the government is exploring these solutions. It was signposted clearly in the National Homelessness Plan, alongside other measures aimed at moving the dial on TA.

However, budgets and policy decisions dispersed across Whitehall departments and local authorities are not aligned. Value for money decisions are being taken in isolation without reference to the wider public purse, including health and education.

A change to looking at the issue holistically won’t be easy but is possible – government and combined authorities can act as the catalyst for scale, building on their convening power, creating common frameworks, negating the need for protracted negotiations and removing barriers to partnership where they exist. Government could also incentivise all sides to take on additional risk, potentially supported by guarantees or lower-cost finance.

Our report includes recommendations for local authorities, particularly on diverse strategies and how to configure internal teams to overcome the siloed nature of working that can exist at local levels.

“We invited an east London resident to share her experiences of TA... she spoke eloquently about her five years of being placed in properties with such severe damp and mould that one of her children got pneumonia”

Along with others in the sector, we also think there is a key role for registered providers, particularly looking at how best to utilise void stock or stock earmarked for disposal – an estimated 80,000 in the next 10 years.

Meanwhile, the homelessness crisis is projected to deepen. The latest figures continue to trend negatively, with nearly 135,000 households in TA in February 2026. The Local Government Association also published research estimating costs would “balloon to £4bn a year by 2029-30” without action.

There are also examples of companies converting unsuitable properties from the lower end of the private rented sector into TA for profit, compounding the problem further. Without urgent action, the solutions will continue to get harder to implement.

This is not just about the cost, as eye-watering as it may be. These are real people, children and communities. At best they are being made ill, and deprived of the opportunities that the rest of us take for granted. At worst, TA is killing them.

At our launch event in parliament in January 2026, we invited an east London resident to share her experiences of TA. A mother of four, she spoke eloquently about her five years of being placed in distant hostels, communal B&Bs and properties with such severe damp and mould that one of her children got pneumonia.

I will leave you with her final line: “I am asking you today, as people with the power to make a difference to the lives of children like mine, to not only consider the costs of temporary accommodation, and how to make a return from families like mine, but the impact on us.”

That duty is on us all.

Janani Paramsothy, associate director, Newbridge Advisors