High government borrowing costs mean the scheme to buy homes to tackle homelessness is ‘not currently viable’, reports Sebastian Mann, Local Democracy Reporter

Waltham Forest Council’s plans to buy 400 houses to tackle homelessness have been put on hold for the second time in three years.

The town hall teamed up with Mears, a property management firm, to bring more homes into use to offset the pressures of temporary accommodation.

Keeping families in temporary housing is one of the biggest financial challenges the council faces, but high government borrowing costs mean the scheme is “not currently viable,” deputy council leader Ahsan Khan said.

He said: “We have been exploring how we can build on this success with Mears through a second joint venture.

“Unfortunately, high gilt rates, which are outside of the council’s or Mears’ control, mean it is currently not viable to proceed.

“This will be kept under review over the next year so we are ready to move if the rates should fall to a suitable level.”

Gilts are loans the UK government borrows from investors and promises to repay with interest. When gilt rates go up, the cost of loans for councils and private investors goes up also.

Cllr Khan added the council would continue to “explore ways to address the challenge of ever-increasing demand for temporary accommodation”.

He said: “We have one of the best records in London for delivering affordable housing, which allows local people the chance to own a home in Waltham Forest where their friends and family are. Building the homes we need is the only surefire way to tackle the housing crisis head on.”

The joint venture between Waltham Forest and Mears, known as JV2, is the second of its kind. The first joint venture, in 2018, saw the council successfully acquire 330 homes.

After being green-lit in late 2022, JV2 was first shelved after former Prime Minister Liz Truss’ Mini-Budget badly hit borrowing rates.

The council’s cabinet approved it for a second time in June last year, with council leader Grace Williams saying at the time: “We really need long-term, good quality homes we can access very quickly.

“We’re seeing an increase in need and have never seen such challenging market conditions.”

A spokesperson for the Mears Group added: “We remain fully committed to supporting the council’s vision of providing long term, safe, well-maintained homes for those in need as opposed to short term temporary solutions.

“We continue to work closely together to find a viable model for any potential second [joint venture].”

Of the 400 new homes, around half will be in London, the council said, while the rest will be ‘as near as possible’ in places like Kent, Essex, or Surrey.

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