I will answer my own question (with the response from DWP);
There are strict guidelines that determine if LA property is treated as Temporary Accommodation for subsidy purposes.
Please see the guidance enclosed in the 2017 Subsidy Guidance Manual
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/599892/hbsgm-section6-mar-2017.pdf
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/601934/hbsgm-appendices-2016-17.pdf
Your conclusion is correct leases must not exceed 10 years for property used as temporary accommodation on which subsidy is to be claimed. I do hope this answers your query. If you have any further questions please do not hesitate to contact us again.
Regards
Housing Benefit Subsidy Team
