A multibillion-pound bet on commercial property by local authorities is a “disaster waiting to happen”.

The Taxpayers Alliance pressure group has warned that income from the £6.6bn of investments is now millions of pounds below forecasts.

Of nine councils surveyed, five reported that rents were below forecasts by a total of £2m in the most recent year for which data was available.

Runnymede council in Surrey faces an £826,000 shortfall on total investments valued at £368m; a 251-bed student housing block acquired by Cambridgeshire county council has returned £180,000 less than anticipated; and a portfolio owned by Sedgemoor council in Somerset has fallen in value by £917,000.