Havering Council has defended its decision to enter into a 40-year build to rent
deal with Inspired Solutions, despite scrutiny over the lack of a formal tender process. The council's Overview & Scrutiny Board met on Wednesday, March 25, 2026, to discuss a call-in of the Cabinet's decision to agree a nomination agreement for up to 600 properties.
The scheme aims to address the council's significant pressures with temporary accommodation (TA) and hotel costs, which have led to substantial budget overspends. Under the agreement, Inspired Solutions will identify and purchase land with existing planning permission in Havering, fund the development of new properties, and then enter into a 40-year nomination agreement with the council. The council will have 100% nomination rights to these properties, with rents capped at Local Housing Allowance (LHA) 2024 rates.
Councillors raised concerns about the procurement process. Officers explained that a formal tender was not required because Inspired Solutions brought the site and development proposal to the council. They argued that the scheme represented best value by comparing its costs and risks to those of temporary accommodation and other affordable housing development options. The council would have the ability to agree the number of homes, the type and mix of homes, the specification and design of those homes before entering into a Property Nomination Agreement.
Concerns were also voiced regarding the financial risks, the company's track record, and the potential for concentrations of high-needs households. Simon Smith, Managing Director of Inspired Solutions, assured the board that they had secured financing and were in the final stages of contracts with another local authority. For that authority, Inspired Solutions selected locations, amended existing consented planning under a Section 73 amendment to vary the appropriate accommodation, and the total number of homes is 229. They expect to start completing on those sites within quarter two of the current year and commence construction in quarter three. The agreement with this other local authority is a lease, not a nominations agreement.
To ensure that the 'build to rent' properties do not lead to a concentration of high-needs households, the council outlined a resettlement period and a selection process. This includes a selection process to ensure that only individuals with a track record are allocated, and that the council is familiar with their history and associated risks. A resettlement period will be agreed to ensure residents are appropriately supported into the development until they no longer need it, at which point the normal management will be taken up by the housing management company.
We anticipate that the first tranche of properties will be delivered in late 2028 early 2029 with further tranches in subsequent years. The initial cost savings are projected to materialize in the first year, with an estimated cost avoidance of £690k for the first 71 units. The rents will be capped at the Local Housing Allowance (LHA) 2024 rates, and indexation will be limited to and track the rates set by the Department of Working & Pensions (DWP).
Following extensive debate, the Overview & Scrutiny Board voted not to uphold the call-in, meaning the Cabinet's decision can be implemented immediately. The council's financial exposure is limited to void losses, repairs beyond general maintenance, and potential rent arrears. The total anticipated cost of voids, bad debt, and repairs above general maintenance over 40 years for Inspired Solutions is £215,418,823 for 600 properties, and £35,863,140 for 71 properties.
The scheme is projected to deliver significant cost avoidance, with an estimated £56.6 million saving over 40 years for the first 71 units, and a potential £579 million saving if all 600 units are delivered. Officers assured the board that the council's financial commitment is only triggered upon practical completion of the properties and that the costs are significantly less than continuing to use expensive nightly-charged accommodation.
Councillor Laurance Garrard, Chair of the Overview & Scrutiny Board, used his casting vote to break a 5-5 tie, resulting in the decision being implemented immediately. The meeting agenda and public reports pack can be found at Agenda frontsheet 25th Mar 2026 and Public reports pack 25th Mar 2026 respectively. Further details can be found in the Cabinet Paper - Build to Rent at the Local Housing Allowance and the Inspired Solutions High Level Financial Model.
