Properties offered to member councils by a social lettings agent owned by London boroughs have plummeted by more than 90% in two years.

A strategic report for the year ended March 2024 by Capital Letters, which was created to help boroughs address the housing crisis, revealed the number of properties offered to its member authorities went from 2,615 in 2022 to just 257, with the growing gap between Local Housing Allowance (LHA) and soaring private rents blamed.

The report said 210 of the 257 properties were let to homeless households – down from 669 last year.

It read: ‘In the financial year 2023-24, the continuing impact of changes in the PRS [private rented sector] and particularly rent increases remained evident, with landlords preferring to let to private individuals able to meet the cost of rent rather than at LHA levels required by our members.'

A joint statement from Capital Letters and member boroughs read: ‘In response to market conditions Capital Letters has gone through significant cost saving measures including reducing staffing by 60%.'

The not-for-profit company lost more than half of its member boroughs last year after councils complained the firm ‘could not supply sufficient properties to help meet our urgent housing needs', was unable to ‘act nimbly' and could not ‘influence the market in the way that was hoped'.