Whanganui's Salvation Army is desperately searching for rental property to use as emergency accommodation for the town's homeless people.

Despite having funding for seven houses, the Sallies are struggling to source them, Major Glenn Anderson said.

The soaring demand for rental property, coupled with "prejudice" from landlords, is proving a barrier.

"We went to a viewing in Bell Street for a three-bedroom house and 27 people turned up to view it," Mr Anderson said.

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Competition for rentals was fierce, and he said "beneath the veneer" many were homeless.

He's also battling "prejudice" against his tenants, with some landlords reluctant to rent to the Salvation Army because of the kind of tenants they expect.

But Mr Anderson said the Sallies would prove a better tenant than some private renters. It would provide furnishings, test for P, repair damage and pay the rent.

"It's just convincing landlords to get over their prejudices."

The latest statistics from the Ministry of Social Development - from March this year - show 58 families or individuals in Whanganui in immediate need of housing or with serious and persistent need. But none of Housing New Zealand's 561 houses in the district are available to be occupied.

The Salvation Army has a new contract with the Ministry of Social Development that covers seven houses to accommodate people in need for 12 to 24 weeks. The Sallies then make sure the tenants find longer term accommodation and oversee their welfare for a further three months.

Mr Anderson said they had already hired a part-time tenancy manager and fulltime social worker, but finding seven houses to rent was proving the problem.

Ozanam Villa, the former hospital visitor accommodation, and its annex in Koromiko Road will be two of the Sallies'houses, when agreement with other parties on a lease has been reached. It has secured two other houses, but is still looking for one with three bedrooms and two with two bedrooms.

Working through a property agent was proving slow, Mr Anderson said - by the time he could follow up on available houses they were often gone.

In December last year, the ministry's deputy social housing chief executive Scott Gallacher said 10 more one-bedroom, five two-bedroom and five three-bedroom houses would be made available in the Whanganui district by 2020. They could be either owned or leased by Housing New Zealand, or by a registered social housing provider such as the Salvation Army.

A spokesperson said the ministry was working with providers on what they needed in order to provide these houses.

In another change, the Salvation Army is moving its Whanganui headquarters away from a complex in Guyton Street and by October it will occupy a new complex in Indus Street.