More than 200 families will be able to move from temporary accommodation into permanent homes in Westminster.
Under the government's Settles Homes scheme, two and three bedroom homes are being bought from leaseholders who want to sell their properties.
Former homeless man Fouad Murad and his three children became the first family to be housed permanently under the scheme, at a property on the Lisson Green Estate, in Lisson Grove.
The initiative is funded by Westminster Council and the government's department for communities and local government.
Westminster's housing arm CityWest Homes aims to house between 20 and 30 families by the end of January, with the remainder moving in over the next two years.