Key Points
- Emergency Expenditure: Merton Council has approved a £35 million plan to acquire 125 freehold and long-term leasehold properties to use as temporary accommodation.
- Rising Crisis: The number of homeless households in the borough living in temporary accommodation has surged to 732 as of March 2026, a significant increase from 199 in early 2020.
- Housing Register Pressures: The authority’s housing register now includes over 10,000 applicants, driven by a surge in local rents of more than a third over the past five years.
- Long-Term Strategy: The initial purchase of 125 homes is part of a broader four-year programme intended to scale up to 225 homes.
- Financial Strain: The council faces heavy financial pressure from the reliance on expensive, nightly-paid private accommodation for homeless households, prompting a shift toward council-owned temporary stock.
Merton Council has authorised a £35 million emergency spending package to purchase over 100 properties, aiming to combat a severe temporary accommodation crisis that has seen the number of homeless households in the borough more than triple since the pandemic.
Merton (The Londoner News) July 17, 2026 – Labour-led Merton Council has formally approved an ambitious strategy to acquire 125 homes this year to mitigate the spiralling costs and rising demand associated with temporary housing. As reported by Harrison Galliven, a Local Democracy Reporter for MyLondon, this decision comes as the borough faces an acute shortage of affordable housing, with the council’s housing register now ballooning to more than 10,000 applicants.
Why is Merton Council spending £35m on temporary homes?
The decision to allocate £35m towards the acquisition of freehold and long-term leasehold properties follows an urgent Cabinet meeting held on Monday, July 13. The strategy is designed to break the council’s dependency on expensive, nightly-paid commercial accommodation, which has placed an unsustainable burden on municipal finances.
According to council reports cited by Galliven in MyLondon, there were 732 households in Merton living in temporary accommodation by March 2026, a sharp rise from the 199 households recorded in early 2020. This trend reflects a broader crisis across London, where surging rents in the private sector have far outpaced housing benefit support, leaving many families unable to secure stable tenures.
What factors are driving the housing crisis in Merton?
The local housing market is described as “malfunctioning,” a sentiment echoed by senior council officials. As reported by Harrison Galliven of MyLondon, Kathryn Eames, the Director of Regeneration and Planning at Merton Council, noted that “many residents of the borough are experiencing social and economic hardship because of a malfunctioning housing market”.
This dysfunction is exacerbated by several interconnected factors:
- Rent Hikes: Private sector rents in the borough have surged by more than a third over the last five years.
- Evictions: There has been a notable increase in homelessness resulting from Section 21 “no-fault” evictions, as well as households leaving Home Office accommodation.
- Supply Shortages: While the council has set targets for affordable housing, the actual delivery of new stock has struggled to keep pace with demand.
During the Cabinet meeting, Councillor Andrew Judge, the Cabinet Member for Housing and Sustainable Development, acknowledged the daunting nature of the challenge. As reported by MyLondon, Cllr Judge stated:
“In the longer term, we are going to be facing immense housing [pressures]”.
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What is the long-term plan for housing in the borough?
The approved £35m investment is not a standalone measure but the beginning of a phased expansion. The council intends to scale the programme to secure a total of 225 homes over the next four years.
This move toward becoming a stock-holding authority is a significant shift for Merton, which is historically unusual among London boroughs for not owning or managing any council housing. The council is also taking steps to re-establish a Housing Revenue Account (HRA) by the start of the 2027/28 financial year to manage this new stock effectively.
How does the wider London context impact Merton?
Merton’s struggles are mirrored across the capital, where local authorities are grappling with similar financial pressures. According to Inside Housing, a new London Plan was launched on July 16, 2026, which introduces updated, borough-by-borough affordable housing targets. Under this new framework, Merton’s affordable housing threshold is set to rise to 25%, reflecting the Mayor of London’s broader ambition to eventually return to a 35% threshold across the city as market conditions improve.
Despite these regional policy shifts, the immediate pressure remains on borough councils to provide emergency shelter. For Merton, the strategy to purchase properties directly is seen as a necessary intervention to stabilise housing outcomes for its most vulnerable residents while it works toward the longer-term goal of increasing the total supply of affordable homes.
The council’s proactive, if expensive, approach highlights the limitations of the current housing market. With the housing register reaching 10,000 households and the number of people in temporary accommodation reaching levels unseen five years ago, the cabinet’s decision marks a pivotal moment in the borough’s approach to social welfare and urban planning.
As the council moves forward with its acquisitions, all eyes will be on whether this capital investment can successfully reduce the reliance on nightly-paid rooms and provide a more sustainable, secure form of housing for those currently navigating the homelessness system.
