Lambeth Council turns to private landlord for £5.8m homeless housing deal in Streatham

Lambeth Council is set to sign a ten-year, £5.8 million leasing deal with private landlord Woodstar Capital to provide 30 studio units for homeless residents in Streatham, as part of a push to cut its spiralling temporary accommodation bill.

Under the plan, approved in a Cabinet Member Delegated Decision Report, the council will take on five properties under Full Repairing and Insuring (FRI) leases at rents set at 90 per cent of the Local Housing Allowance rate.

The homes – a hybrid of studio and HMO-style rooms with shared kitchens and lounges – will be used to house single homeless people placed under sections 188 and 193 of the Housing Act.

The move comes as Lambeth faces an acute housing crisis. The borough currently supports 4,577 households in temporary accommodation, with more than three-quarters in costly nightly-paid placements. That setup costs the council around £105 million a year.

Officials say the Woodstar arrangement will save £342,000 annually compared with nightly rates, generating £3.4 million in savings over the decade-long term. The scheme will be funded through the General Fund and managed by the Council’s Housing Hostels Team.

The deal illustrates how Lambeth – like many London councils – is increasingly turning to the private sector to plug gaps in its housing stock, after years of reduced social housing supply and rising homelessness demand.

Council officers recommend the ten-year lease as the most financially sustainable of three options offered by Woodstar, despite the longer-term risk of the council shouldering full maintenance and repair costs under the FRI terms.

The report notes that the arrangement “presents an immediate cost reduction” and will allow the council to claim higher housing-benefit subsidy than it can on short-term leases. If government subsidy rules change, the council would still make a smaller saving of around £144,000.

The scheme relies on powers granted under the Localism Act 2011 and helps meet statutory duties under the Homelessness Acts and Housing Acts of 1985 and 1996. Council lawyers warn, however, that long leases create “significant financial liabilities” if the properties require major structural work.

An Equalities Impact Assessment found no negative effects, with placements prioritised for the most vulnerable in-borough households. Officials say the new homes will meet energy-efficiency standards and support the council’s climate-emergency goals.

The decision is due to be signed off by Deputy Leader Cllr Danial Adilypour (Housing, Investment and New Homes), following consultation across Finance, Housing, Property and Legal departments.

If approved, contracts would be executed later in November.

The deal may save millions – but it also underlines how far Lambeth’s housing response now depends on the private market rather than public stock.