You are viewing 1 of your 1 free articles
RBKC releases £100m from pension fund for temporary accommodation purchase
The Royal Borough of Kensington and Chelsea (RBKC) is looking to use up to £100m of its pension fund as it seeks to buy 250 properties for homeless households.
RBKC releases £100m from pension fund for temporary accommodation purchase #UKhousingUnder the scheme, which the west London borough believes is the first of its kind in the UK, the council intends to lease and manage purchased properties to provide safe, stable and affordable homes.
Like most local authorities, RKBC is also urgently trying to find ways to reduce its reliance on unsuitable and expensive private-sector temporary accommodation, including hotels and B&Bs. Westminster City Council recently announced a £235m deal to buy 350 homes from A2Dominion to use as temporary accommodation.
RBKC said its project, to be discussed by its leadership team committee on 4 June, would operate at zero cost to taxpayers since rental income is intended to cover both payments to the pension fund and ongoing management and maintenance costs.
Payments to the pension fund would be at a discounted rate, compared with if the money was borrowed commercially, the council said.
In April, London Councils warned that a £330m homelessness budget overspend is the “single biggest risk” to members’ finances, and is putting some at risk of bankruptcy.
The figure represents a 60% increase on boroughs’ original homelessness budget plans for the year, with temporary accommodation costs having risen by 68% across the capital between 2022-23 and 2023-24.
RBKC has around 2,050 households in temporary accommodation, of which 80% are families, with a similar proportion of placements being made out of borough. It said the homes it intends to buy could be let either as temporary accommodation or as longer-term private rented housing.
The announcement of the scheme follows an in-principle decision, taken in September 2024, to invest in property to meet local temporary housing need. RBKC has already purchased more than 40 properties since 2022 for use as temporary accommodation.
Elizabeth Campbell, the leader of Kensington and Chelsea Council, said: “London is facing a growing homelessness emergency that is devastating lives and placing huge pressures on councils’ finances.
“It is going to take innovative, decisive action to tackle it effectively,” she added. “If agreed, this could be a pioneering partnership to potentially unlock hundreds of good quality homes for vulnerable families and provide stability and a brighter future for those who need it most.”
Quentin Marshall, chair of the council’s investment committee, said RBKC’s pension fund had delivered “the best performance of any scheme in the country”.
He added: “The purpose of the fund is to ensure that the pensions we owe our existing and former employees are rock solid.
“But it’s also right we deliver for taxpayers and residents. This plan both provides for an attractive and commercial return to the fund, as well as delivering great value to taxpayers and homes for some of the most vulnerable in our society.”
Sign up for our Council Focus newsletter
Already have an account? Click here to manage your newsletters
Related stories
