Newham Council and Local Space: a model built to reduce homelessness costs and create settled homes

Local Space was established in 2006 after Newham Council made the decision to create a new housing association as a more sustainable way of responding to homelessness pressures.

Then, as they do now, Newham faced some of the highest levels of temporary accommodation use in the country, alongside rising costs. The challenge was not only securing enough homes, but securing homes that were well managed, affordable within the benefits system and capable of providing continuity for families over the longer term.

Rather than relying solely on the private rented sector or short-term placements, Newham Council created Local Space to play a specific role: acquire and lease good quality homes for households in need of a home.

Zulfiqar Mulak, Director of Housing Needs at Newham Council, said: “Local Space was created to tackle a problem that was already acute in Newham: unprecedented temporary accommodation costs and a chronic shortage of settled housing. We needed a model that could give families stability, while also giving the council greater control over quality and cost.”

The founding gift

A central part of Local Space’s formation was the transfer of 450 homes into Local Space’s ownership. These homes formed the foundation of the organisation and provided the stability needed to expand.

Mark Kent, Deputy Chief Executive at Local Space, explained: “The original 450 homes were the founding gift that made everything else possible. They created the base Local Space needed to secure long-term investment and grow the number of homes available for Newham’s homelessness duties.”

These 450 homes became the collateral that allowed Local Space to secure the investment required to acquire additional properties. At the time, local authorities were unable to borrow against certain assets, meaning that establishing an independent organisation and transferring the homes into its ownership enabled them to be used as security. This was a critical step, as it allowed Local Space to grow beyond the initial portfolio and begin delivering the larger volume of homes needed.

Positive household outcomes

While the financial case for the model is strong, the long-term impact on residents is the clearest measure of its success.

Since its creation in 2006, Local Space has grown from the original 450 homes to a portfolio of more than 3,000 homes across East London and Essex. That growth has enabled thousands of households to move into settled, longer-term housing.

For many residents, that shift means far more than a change of address. A settled home allows children to remain in the same school, gives adults the space to focus on employment or training and provides a happy, healthy lifestyle for the whole family.

Recent resident satisfaction levels of 85% place Local Space above the national average and among the stronger performing providers in London. While no provider stands still, it reflects consistent delivery of good quality homes and services.

Josie Parsons, Chief Executive of Local Space, said: “Behind every property is a family who finally has somewhere safe and stable to build their lives. That foundation changes outcomes. It gives people the ability to move forward rather than simply cope in temporary accommodation.”

Zulfiqar Mulak added: “What we see in practice is the difference that settled housing makes to families. It supports wellbeing, reduces disruption and leads to better long-term outcomes for residents.”

Together, these outcomes underline that the model was designed not only to manage cost but to improve life chances for households who need it most.

Expanding supply

Using the strength of the founding portfolio, Local Space went on to acquire around 1,000 additional homes to support Newham’s homelessness duties. This was not a slow new build pipeline. It was a practical approach focused on acquiring existing homes and bringing them into use as quickly as possible.

Josie Parsons commented: “Families need homes today, not in two years’ time. That is why our model focuses on acquiring and refurbishing existing homes. It is one of the fastest ways to provide settled accommodation.”

The Growth Agreement

As the scale of homelessness pressures across London grew over the years, Newham and Local Space expanded the model further through what became known as the Growth Agreement.

This agreement was the mechanism that enabled Local Space to deliver around 720 additional homes, building on the original portfolio and the homes already acquired.

Mark Kent said: “The Growth Agreement massively expanded supply. It built on the original portfolio and enabled Local Space to deliver more homes on top. That scale of delivery is one of the clearest examples of what this model can achieve when the commitment is there.”

In total, the founding 450 homes plus around 1,000 acquired homes created an initial base of around 1,450 homes, with the Growth Agreement adding around 720 more.

How the model works in practice

Local Space’s role goes beyond simply owning homes. It works in partnership with Newham Council to support its homelessness duties.

From the outset, the model has been based on Local Space acquiring, refurbishing and leasing homes back to the council. The council retains nomination rights and, for the majority of homes in the original portfolio, acts as landlord and manages the properties directly.

Over time, the model has evolved to include Local Space acting as landlord and managing homes in parts of the portfolio, primarily within later growth programmes.

Local Space does this by:

• Acquiring homes in areas of high demand.
• Refurbishing and improving properties to ensure quality and compliance.
• Working with the council to provide stable accommodation for families.
• Setting rents at levels designed to be affordable within the benefits system.
• Operating within agreed nomination and leasing arrangements with the council.

While Local Space is a registered provider, its model is distinct from general needs social housing. It is designed to sit between temporary accommodation and general needs housing, providing families with a more stable and higher quality alternative.

Zulfiqar Mulak explained: “The value of this model is not just in the homes delivered. It is in the control it gives us over quality, affordability and long-term outcomes. It gives us a solution that is better for residents and more sustainable than relying on nightly paid accommodation.”

This partnership structure, with the council retaining a central role in management and nominations, is a key factor in how the model maintains both quality and cost control.

Affordable within the benefit system

Local Space homes are generally offered at rent levels between traditional social rent and market rent. In practice, rents average around 69% of equivalent market rent, 97% of Local Housing Allowance rates and 36% of average earnings. Crucially, Local Space aims to keep rents aligned with what is affordable within the benefits system, ensuring homes remain financially accessible for households moving out of homelessness.

This makes the model fundamentally different from many private sector temporary accommodation options, which can be unaffordable, unstable and far more costly for councils.

A potential £13 million a year saved

One of the strongest outcomes from the Local Space model is the financial impact for Newham Council. Mark Kent confirms that the majority of homes leased to Newham deliver a direct financial benefit to the council, with more than £13 million per year saved compared with nightly paid accommodation costs (or £6 million compared with weekly market rates).

Mark Kent said: “Because Local Space rents are significantly lower than nightly paid accommodation rates, including hotels and B&Bs, Newham saves more than £10 million every year by housing families in Local Space homes instead. Crucially, this is not a one-off saving but a recurring annual benefit, making it one of the clearest value for money proofs of the model.”

A model other councils can learn from

The pressures Newham faces are not unique. Across the UK, councils are struggling with homelessness and housing supply constraints.

Newham’s approach shows what is possible when a local authority takes a long-term view and creates the structures needed to bring homes into use at scale.

Josie Parsons said: “This is not just a housing model. It is a stability model. It is about reducing disruption for families and giving councils greater certainty. It shows what can happen when housing delivery is designed around real-world pressures, not ideal scenarios.”

Looking Ahead

The model continues to evolve. Local Space remains focused on delivering homes for families in housing need, with plans to continue growing its portfolio through further acquisitions and targeted investment in existing homes.

As homelessness pressures continue, the organisation is focused on maintaining the quality and compliance of its current homes while expanding supply in a way that strengthens long term resilience.

Josie Parsons explained: “We are not standing still. Our priority is to keep growing in a way that protects quality, supports residents and strengthens our long-term resilience. The pressures facing boroughs are not reducing, so our model must continue to adapt.”

As homelessness pressures persist across London, the Local Space model provides a proven example of how councils and housing providers can create long term structures that deliver both financial impact and lasting benefit for residents.

While the partnership with Newham Council remains central to its origins, Local Space has since expanded its role. It now works with five additional nominating local authorities and has grown its footprint across multiple London boroughs and Essex districts. This evolution reflects its position as an independent organisation, able to apply its model more widely to support councils facing similar homelessness pressures.