London councils and housing companies they own have spent more than £140m buying up homes to relocate homeless people out of the city.
More than a dozen councils in the capital have collectively spent millions buying up more than 850 properties in towns and cities across England since 2017, Guardian analysis of property ownership data found.
The homes are either owned directly by councils or by companies they partly or wholly own. They are used to house homeless individuals and families, either temporarily in emergency accommodation or permanently in privately rented homes.
Most of the homes are in deprived areas in the south-east and east of England that are already under huge pressures due to homelessness among their own residents. But in the past year London councils have looked farther afield, buying up a small number of properties in the Midlands and laying out plans to buy more in north-east England.
Housing charities said families’ lives were thrown into “turmoil” by being moved away from their communities. Labour MPs urged the government to reconsider its approach to the “scarring” out-of-area placements, which are at their highest levels since records began.
Waltham Forest and Bromley councils, via companies they jointly own with the housing and social care company Mears Group, have collectively spent almost £80m buying more than 500 homes in areas including Harlow and Thurrock in Essex and Maidstone in Kent since 2017. Both councils use these properties to discharge their homelessness duties and permanently rehouse people out of London.
Brent council has spent more than £18m buying 75 properties across Milton Keynes, Hemel Hempstead and Slough, while Barnet council has spent more than £10m buying nearly 70 properties in Peterborough and Luton. Brent and Barnet used companies they wholly owned to make these purchases since 2017.
Housing Gateway, a company wholly owned by Enfield council, spent £13m in 2018 buying Greenway House, a converted office block on the outskirts of Harlow with 83 flats that are used as temporary accommodation.
The Guardian previously revealed that councils had paid millions to relocation companies to help them permanently move homeless people to the Midlands and north of England. Recent property purchases suggest that some London councils are starting to move the practice in-house.
In December, Enfield council laid out plans to buy 28 homes through Housing Gateway around Liverpool this year. It said these properties would initially be used as temporary accommodation with the aim of finding homeless households long-term housing in the area once relocated.
Redbridge council, which has spent more than £10m buying 55 properties outside the capital since 2020, has bought homes 100 miles away in Coventry and Leicester in the past year. They are being used as temporary accommodation but the council said it planned to privately discharge homeless households into these homes.
Harlow is the most popular local authority for London councils to buy homes in, with 164 properties acquired there since 2017.
Many of the homes bought are concentrated in areas where hundreds of households are already homeless. Eighty-four homes owned by London councils are in Basildon in Essex, where nearly 700 households are living in emergency accommodation.
Basildon council’s leader, Gavin Callaghan, has previously said his authority had no choice but to find local people new homes in the north of England because its own housing stock was being used by London councils.
MPs have been increasingly vocal about out-of-area placements. Government data shows the number of households placed in temporary accommodation outsidetheir borough is at an all-time high, with a 39% rise in such placements in the past 12 months.
Florence Eshalomi, a Labour MP who is the chair of the housing, communities and local government parliamentary committee, said: “Out-of-area placements force some of our most vulnerable families away from desperately needed support and devastate the life chances of children, who end up travelling for hours simply to go to school.
“This is the result of the toxic mix of the housing crisis and the stretching of local council finances to breaking point. The government’s long-term housing strategy must give local authorities the support and supply to ensure everyone has access to the right housing and support in their own community.”
Naushabah Khan, the Labour MP for Gillingham and Rainham, who also sits on the housing committee, said: “The negative impact of out-of-borough placements is the scarring legacy of a deeply damaged housing market that was neglected under 14 years of a Conservative government. As local councils struggle with an ongoing housing crisis, this last-resort practice has become the norm.”
Polly Neate, the chief executive of the housing charity Shelter, said: “On top of the trauma of becoming homeless, families’ lives are being thrown into further turmoil by being moved miles away from their communities, often overnight. Councils are meant to accommodate families who become homeless in their own area, but a dire shortage of social homes, extortionate private rents, and record homelessness is making this increasingly difficult.
“Instead of sinking money into temporary solutions, we need to see social homes built in areas where they are most needed.”
Waltham Forest council said the purpose of its housing company was to provide long-term good-quality homes to discharge the council’s homelessness duties and move households on from temporary accommodation. It said loans used to buy these homes were taken out by the company itself, not the council, and they did not appear on council balance sheets.
Bromley council said its policy was to secure housing in or as near to Bromley as possible but, as it receives lower funding as an outer London borough, many local homes were unaffordable, forcing it to look farther afield. It said its housing companies were primarily partner-funded.
Barnet council said when it placed people in temporary accommodation it ensured it was in or as close as possible to the borough. It said neither the council nor any of its subsidiaries had bought homes outside the borough since 2020.
Redbridge council said all properties it had acquired were being used as temporary accommodation but it aimed to use these homes to provide longer-term settled tenancies by discharging its homelessness duty through a housing company.
Brent council said the vast majority of homes bought via its housing company were in London and it was working to build council housing to deal with the 34,000 people on its housing waiting list. It added that none had been bought outside London since 2021.
