Lambeth facing £35m homelessness overspend as council looks beyond borough for temporary housing
Lambeth Council overspent its homelessness budget by £35 million last year, with new documents showing the authority is now looking increasingly outside the borough to house homeless families as it …
Black News 
Lambeth Council overspent its homelessness budget by £35 million last year, with new documents showing the authority is now looking increasingly outside the borough to house homeless families as it tries to bring costs under control.
A new Temporary Accommodation Procurement Strategy set to be approved by the council sets out how Lambeth plans to manage what officers describe as a system that has become “too large, too costly, and overly reliant on nightly paid accommodation.”
The report reveals that the council’s Housing Needs service overspent by £35m in 2024/25, with a further £17m overspend forecast for 2025/26, largely driven by the soaring cost of temporary accommodation for homeless households.
Lambeth currently has around 4,500 households in temporary accommodation, one of the highest figures in the country.
The new strategy aims to reduce that number significantly — with a target of bringing it down to around 2,500 households by March 2029.
But one of the key ways the council expects to achieve this is by relying more heavily on housing outside the borough.
The report states that because of Lambeth’s severe shortage of affordable housing and high private rents, most placements will be outside Lambeth, with affordability likely to be the dominant factor when deciding where households are housed.
Officers say the strategy will also seek to reduce the council’s reliance on nightly-paid accommodation, which can include hotels and other short-term lets that are typically more expensive and sometimes of lower quality.
Lambeth currently relies on nightly-paid accommodation at around double the rate of comparable boroughs, according to the report.
Instead, the council plans to expand the use of longer-term leases, council-controlled accommodation and placements into the private rented sector.
The strategy also signals a shift in how homelessness cases are resolved. While the council says it would prefer to place households in social housing within Lambeth, the report acknowledges that demand far exceeds supply, meaning that most applicants will ultimately be housed in the private rented sector rather than council homes.
The new approach forms part of Lambeth’s wider housing and homelessness strategies and is intended to reduce both costs and the length of time families spend in temporary accommodation.
However, the report also notes that the success of the strategy depends on meeting “challenging targets” to reduce demand and increase the availability of affordable housing options.
For the council, the strategy represents an attempt to regain control of one of the largest financial pressures facing the borough. But for many households facing homelessness, it may increasingly mean that a temporary home — and possibly a permanent one — will be found outside Lambeth itself.
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