They Bought
Your House

A friend who works in housing explains it over a drink, in the tone of someone who has given up being surprised by things.

Councils have legal duties towards eligible homeless households. Where an accommodation duty is owed, it is not optional. The council needs somewhere to put people quickly. The way most councils have been meeting that duty for the past decade is nightly-paid accommodation: hotels, bed and breakfasts, properties managed by private contractors at rates that run to two thousand pounds a month or more per family.

The ownership cost of the house you were buying could easily look cheaper than that. Even the premium starts to look small beside the hotel bill. At the end, the council still owns an asset. In the hotel it owns nothing and the bill keeps arriving.

He says it like it is obvious. On a spreadsheet it probably made sense. The spreadsheet wins.

The state is not adding supply. It is reallocating scarcity.

The government created the Local Authority Housing Fund explicitly to help councils grow temporary accommodation stock and reduce reliance on expensive nightly-paid accommodation. Councils buying on the open market are not rogue actors. The policy framework now openly supports acquisition as part of the answer.

Councils spent £2.84 billion on temporary accommodation last year, up 118% over five years. Nightly-paid accommodation alone cost £1.078 billion, up 400% since 2018. Divided across England's 24 million households, that works out to roughly £115 each, already baked into your council tax.

Crawley spent £262,000 on temporary accommodation in 2018. Last year the figure was £5.5 million: roughly two pounds of every three the borough collects, before it pays for bin collections, planning, parks or anything else.

The households in temporary accommodation did not arrive by one route. Some lost private tenancies. Some left Home Office asylum accommodation. Some were pushed there by rents, family breakdown, violence or eviction. The council's problem is that the route no longer matters. Once the duty lands, the bill lands.

Elsewhere in the same market, sitting tenants are being served notice because councils are buying blocks for temporary accommodation. Different councils, different budget lines, the same shortage driving both.

The ratio of house prices to earnings sat below five times median wages for most of the postwar period. It crossed eight sometime around 2020 and has not come back down. A deposit that took eight months to save in 1975 takes forty-seven months today on the same relative salary.

Into that market the government added a buyer with public money, institutional patience and a statutory obligation to secure accommodation.

The public housing stock was the obvious place to start, except most of it had been sold. From 1980, council tenants could buy their homes at a discount, and millions did. Councils were blocked from using the receipts to build replacements. The stock fell from 5.54 million homes in 1979 to 4.18 million today, and the replacement rate is running at about 12,000 a year. At that pace, restoring what was sold would take more than a century.

The hotels were the alternative. Local Housing Allowance limits what support can cover in the private rented sector. In many areas it sits below market rent. If the gap cannot be bridged, the family can lose the tenancy and present as homeless. The council then places them in temporary accommodation at a higher cost, drawn from a different budget with different rules. The regulation meant to save money creates the cost it was designed to prevent. That cost is now, in part, why the council needed your house.

Because buying is cheaper than hotels, councils have started buying back the houses they sold. The Big Issue identified 445 such properties: sold for £35.7 million, repurchased for £97.1 million. Newham sold one in 2015 for £29,100 and bought it back in 2023 for £210,000.

When London ran out of affordable London stock the bidding pressure moved out: councils spending tens of millions in Milton Keynes, Peterborough and Coventry, competing with local first-time buyers using central government money. There is no single national dataset that follows the buyers it displaced.

The logic ends in Richmond. Westminster Council needed 32 flats. It found them at Garden Court: a block in someone else's borough, more than 30 households already living there, one of them eighty-five years old and sixteen years in the same flat. They were all given notice.

A neighbour described it to the local paper: people are being made homeless to house the homeless.

Richmond's own council leader said he had never, in eight years, known a neighbouring borough arrive in his area, evict its residents and export its problems. Westminster's leadership said it had no choice.

They were not lying. The state had made the bad option look rational.

Local councils are responding rationally to a broken incentive structure. They face an exploding temporary accommodation bill, most of it going to hotels and emergency placements they do not control and cannot negotiate down. If they can buy an existing property, even at a premium, the monthly cost falls and they own an asset at the end of it. The spreadsheet justifies the purchase almost every time.

What the spreadsheet does not contain is a line for the buyer who had spent four months on forms and was watching a mortgage rate tick down. The state failed to build enough homes. It is now trying to address the resulting pressure by buying scarce homes from the same private market that first-time buyers, renters and sitting tenants all depend on. The private rented sector is now both the intake valve and the emergency exit: people fall out of it into homelessness, councils buy back into it for temporary accommodation, and everyone left outside pays more.

134,760 households are in temporary accommodation tonight, 175,990 children among them, three times the number in 2011. The £2.84 billion spent on temporary accommodation last year would cover the indicative construction cost of roughly 17,750 social homes at £160,000 per unit, before land. Parliament gave councils the duty to house people. It never gave them the duty to build. The temporary accommodation bill is where that gap lands.

The state counts the households, the children and the bill. It does not count the people it shoved out of the way to get there. There is no dataset for the eviction notice that came because your landlord sold to a council, or for the survey fee that is not coming back, or for the mortgage rate that expired while the estate agent was still on the phone. There is no routine official dataset for either population.

Nobody in this chain has to be corrupt. The council obeys the duty. The landlord accepts the strongest buyer. The vendor takes the cleanest offer. The Treasury funds acquisition because hotels are worse. Everyone follows the incentive.

Then the displaced person disappears.

The household placed in the hotel is counted. The child in temporary accommodation is counted. The bill is counted down to the pound.

The person pushed aside is not counted at all.

Not homeless. Not housed. Just back in the market, bidding against the state.

That is the trick: the system creates a new casualty, then has no category for them.