A not-for-profit company will be created to provide housing for homeless families in 11 London boroughs.

London Councils has been tasked with creating the new company, which will deliver the £38m ‘Capital Letters’ programme by taking on the management of homes provided by the member boroughs.

The aim is to co-ordinate providing accommodation for those at risk of homelessness, reducing the risk of boroughs competing for accommodation and driving up prices.

London Councils’ executive member for housing, Cllr Darren Rodwell, said: ‘With so many homeless households and so little accommodation available, London faces the country’s most serious homelessness challenge.

‘Through collaboration, boroughs will collectively strengthen our market position and secure much better housing options for homeless Londoners.’

Funding for the programme has been provided from the Ministry of Housing, Communities and Local Government’s (MHCLG) £1.2bn fund for tackling homelessness.

Communities secretary James Brokenshire said: ‘Everyone deserves a safe and secure home. I’ve seen for myself how hard each of the London boroughs works to provide those that are homeless with the support they need and a roof over their heads.

‘This radical new way of working and unprecedented collaboration between the boroughs and government will make a real difference – providing more accommodation for the vulnerable and helping them to get back on their feet and away from homelessness for good.’

Over the next three years, the scheme is expected to house more than 35,000 households within Greater London.

The 11 boroughs signed up to the scheme are Barking and Dagenham, Bexley, Brent, Croydon, Ealing, Haringey, Lewisham, Redbridge, Southwark, Tower Hamlets and Waltham Forest.

MHCLG expects more boroughs to join in the future.