Portsmouth council to decide on £31m temporary housing plan

The plan is designed to help ease pressure on temporary housing and address homelessness in the city.

The plan involves allocating £15.64 million in both 2025/26 and 2026/27 to acquire and renovate properties, which will be managed within the council’s Housing Revenue Account (HRA).

In 2024/25, the number of people in temporary accommodation increased by 54 per cent, creating significant financial pressures. The council is projected to overspend by £5.9m by the third quarter of the year.

The acquisition plan could potentially save the council up to £6m annually by reducing the need for costly temporary housing. If demand for temporary accommodation decreases in the future, the properties could be repurposed for general housing.

To support the plan, the council has approved a £1.87m reserve contribution to cover potential shortfalls in the first 10 years. A financial review suggests the plan will generate £44.8m over the next 50 years.

Properties will be selected based on strict financial criteria, including a maximum cost of £300,000 and expected cost savings within the first year.

Although the government has announced additional funding for 2025/26, the council report notes that it will not be sufficient to meet the rising demand for temporary accommodation.

The council intends to use prudential borrowing to fund the acquisitions, which will be based on individual financial appraisals of income and expenditure.

Prudential borrowing allows councils to borrow funds as needed, provided they can afford to repay the debt within their budgets, without requiring central government approval. The key principle is that borrowing must be affordable, sustainable, and aligned with the council’s financial position.

The decision will take by the cabinet member for housing and tackling homelessness, councillor Darren Sanders, on March 12.