Medway Council is considering a £42 million real estate investment to tackle rising homelessness.

The authority’s cabinet will consider plans to invest £42 million to buy 150 homes around the Towns that will be used to house rough sleepers and those at risk of losing their home in urgent need of assistance.

A report that will be considered by the Cabinet says the scheme could provide more accommodation for those in need and save the authority money.

Medway faces increasing rates of homelessness, with 3,828 requests for assistance in 2022/23, an increase of 42% from 2020/21, and this trend is expected to continue.

At the end of October, 468 households were in temporary accommodation compared to 362 at the same time in 2022.

The report says this is in part due pressures caused by the cost of living crisis that is pushing residents into financial hardship.

For 2022/23 the council spent £4.6 million on temporary accommodation, and this figure is predicted to increase to more than £6.5 million by the end of 2023/24.

To meet the rising demand and make money go further, officers have recommended the authority buy properties rather than renting private accommodation to house people in need.

The recommended plan is for the council to borrow £42 million to buy up homes that they will then maintain and rent.

In January 2023, the council agreed to test the scheme and bought 20 properties, costing £5.6 million.

Now the cabinet will decide if they want to pursue an expanded version of the plans which will have to be approved by Full Council at the next meeting on January 24.

Currently the majority of the council’s temporary accommodation is in the hands of private owners, meaning the authority pays a nightly fee when rough sleepers need a place to stay.

The authority charges between £25 and £44 per night which goes to cover the fees of private landlords.

However, if Medway Council owned the properties they would retain that money.

The benefits of private accommodation is that the council isn’t liable for the up-keep of the properties, but rising demand as well as increasing prices in the rental market has meant officers are looking at other options.

Even though they would be liable for maintenance costs on the properties, officers say the investment would be more cost-effective in the long term.

The report, which will be discussed at cabinet on January 16, estimates that the cost of using 150 private properties to meet Medway’s homeless needs would cost £1.7 million per year.

If the council went ahead with the plan, the predicted annual cost would be £1.5 million if repayments for the borrowed money were over 30 years or £1 million if made over 50 years.

The 150 homes would be bought in stages so as not to inflate the local market and pricing residents out of buying a home.

If it went ahead, the council would set up an internal lettings department to take on properties costing approximately £153,000, with ongoing costs of £137,100 a year.

However, long-term, they say this would still represent a saving over the current system of private accommodation.

The scheme will be discussed at the Cabinet meeting and if approved will be taken to Full Council for a vote.