Herefordshire is to spend an extra £5 million over the next two years buying up housing for individuals and families at risk of homelessness.

The county cannot currently meet the growing demand for social housing, leading to “people being placed in temporary accommodation which isn’t fit for purpose and has significant additional costs”, according to Herefordshire Council’s “outline strategic business case” for the investment.

Over the last two years the number of families the council has put up in temporary accommodation has doubled, from 74 in March 2022 to 141 in March 2024.

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This has cost the council over £3 million on what it called “Travelodge / B&B-style accommodation” in the last financial year, plus nearly £400,000 on private sector rentals - costs which it says continue to rise.

The new £5-million loan from the government’s Public Works Loan Board will instead “enable the council to respond to opportunities to acquire and develop further stock to meet demand, and decrease costs spent on temporary accommodation”, its business case says.

Any unused accommodation cold be let out to partner organisations, or even “sold off to generate a surplus at some point in the future”, it adds.

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The council’s cabinet is expected to approve the addition to its capital budget this Thursday (July 18).

The expectation is that any rental income will cover the properties’ running costs and provide a surplus to repay the cost of borrowing, a report prepared for the meeting explains.

The council will meanwhile apply for grants from the government’s agency Homes England to reduce the overall borrowing costs.