West Devon Council is to spend over £1 million buying new temporary homes.

More than half of the money is coming from the government and the authority will fund the rest through external borrowing at an average interest rate of 5.5 per cent for 50 years.

It will cost £28,000 a year to finance the borrowing for the four homes but the council expects to gain nearly £5,000 a year on rental income once repair and borrowing costs are taken out.

West Devon has taken advantage of the three previous rounds of the Local Authority Housing Fund (LAHF), aimed at helping councils purchase property and reduce their reliance on expensive emergency accommodation like B&Bs for people in housing crisis, and it now owns 13 properties in Tavistock and Okehampton.

Members of the council’s hub committee agreed on Tuesday to participate in the fourth round and will receive £590,000 once it has signed a ‘memorandum of understanding’. The council will match fund up to £477,000.

The LAHF was set up in 2022 and West Devon Council was one of the first councils in the country to complete on its first round of acquisitions in 2023.

In addition to the £1.76 million it has received through the LAHF process to date, the council has also used Homes for Ukraine funding, Afghan resettlement funding and section 106 contributions from developers and additional second homes council tax for affordable housing projects.

The report indicates that the new properties will be located in Okehampton and they will be purchased in the 2026/27 financial year.

It states the council has saved £180,000 and avoided over 2,500 nights in less appropriate temporary accommodation for children and their families so far through purchasing its own temporary housing.

It is a requirement that two of the new properties bought through LAHF 4 will be used in the first instance for resettlement and two for temporary accommodation.

The savings are expected to be around £54,600 per annum and there will also be a benefit from a rental income from the two homes.

The report says that other two properties for resettlement will ensure the council is eligible to claim grant funding of £20,300 per person over three years to assist with resettlement. That could equate to annual grant claims of £67,666 based on a reasonable assumption of 10 residents across two properties.

Council leader Mandy Ewings (Ind, Tavistock South West) said the authority was one of the few who had bid on all four rounds of LAHF.

“It has helped us immensely with temporary housing costs and we have also been able to house people who have come here in difficult circumstances.”

West Devon Council is understood to have the lowest number of people needing temporary accommodation in Devon. Despite this it increased the budget for temporary accommodation in 2025/26 by £160,000 after costs rose the previous year to more than £500,000.