Two London councils are in talks with a developer to use a new class of home to house the homeless.
Kensington and Chelsea and Camden councils have been approached by Smart Housing Group to take a 10-year lease on two 40-unit blocks in Hayes, Middlesex, and Kilburn in Camden.

The blocks will be self-contained units for two to three people. They will be classed under the obscure planning category of "sui generis" – meaning they do not fall within any recognised group.

Under the 2002 Homelessness Act, councils are barred from resorting to the traditional option of temporarily housing homeless families in bed and breakfasts.

Socrates Miltiadou, director at scheme architect Papa, said: "This development has sprung up as a direct result of the act. There is a rising demand for medium-term [housing], but this cannot be classed as temporary under the act."

The £3m Hayes block is close to completion. The £4.8m new-build five-storey block in Kilburn will be completed in June 2005.