Recent progress on new build developments at Swinegate in Grantham and Elizabeth Road in Stamford means the money needs to be moved from a budget reserve into the Capital Programme for Housing Development Investment.
This will pave the way for SKDC to act quickly when opportunities to purchase affordable housing arise - offering a ready-made solution instead of building from scratch to help the pipeline of new houses in the District.
Cabinet Member for Housing and Planning, Cllr Phil Dilks, said: "The Council is now being approached from some larger development schemes to acquire the affordable units when some registered housing providers are unable to secure funding.
"The Council has a clear commitment in its Corporate Plan to provide 'Housing that meets the needs of all residents'. This transfer from our reserves will reduce the risk of us not being able to secure property quickly to bolster the housing stock.
"The currently approved HRA budget already in place is now fully committed on new build schemes at Swinegate and Elizabeth Road, so we need to allocate further funds to avoid acquisition opportunities being missed.
"Any decision to purchase property will be dependent on a business case and considered on a site-by-site basis."
It is recommended that Cabinet next Monday recommends to Council to amend the Housing Revenue Account 2023/24 by an additional £1m.
A report to Cabinet says the Council's Housing Revenue Account Asset Acquisition and Disposal Policy applies to acquisition and disposal of land, development sites, residential properties, former council properties, current housing stock and empty homes acquired using Right to Buy receipts, Section 106 affordable homes funding or HRA reserves to increase the supply of affordable homes and to bring more empty homes back into use.