Cost of housing homeless people in temporary accommodation soars to £2.8bn

Councils are paying a steeper price for England’s homelessness crisis as new government statistics show the cost of housing households in temporary accommodation ballooned to £2.8 billion last year.

Local authorities have been pushed to the brink of bankruptcy over rising costs in recent times as the number of households they have a statutory duty to help avoid homelessness has surged.

There are now a record-high 131,140 households living in temporary accommodation, including 169,050 homeless children.

That has seen councils in England face a 25% increase in costs in 2024-25, paying out £2.8bn on temporary accommodation, up from £2.3bn.

The soaring costs mean councils have seen costs more than double – up 118% – in the last five years, spending more than £10bn on accommodating people in temporary accommodation.

Catherine Parsons, managing director of the Big Issue, said:  “Local authority budgets are buckling under the weight of our overreliance on temporary accommodation. These stark figures make it clear we cannot continue to rely on this sticking plaster solution when it comes to the homelessness crisis.

“Labour must urgently deliver its long-promised homelessness strategy, with a focus on easing the economic and social pressures that are causing people to lose their homes in the first place. One hugely positive development will be the end of section 21 no-fault evictions in the Renters’ Rights Bill, which finally nears royal assent.

“On this the Commons must stay firm, deliver for renters, and not kowtow to pressure from the Lords to amend the bill in favour of landlords.”

Mairi MacRae, director of campaigns and policy at housing charity Shelter, urged the Labour government, which has pledged £39bn spending on affordable homes over the next decade, to ramp up building social housing to help families out of homelessness. Shelter has called for 90,000 social rent homes to be delivered annually to tackle the housing crisis.

“While the housing emergency is draining billions in public funds, families across the country are paying the ultimate price.  Money that should be helping them into a secure home is instead shelled out on grim temporary accommodation, just to keep people off the streets,” said MacRae.

“There’s nowhere near enough social homes and as a result homelessness has reached record levels, with thousands of desperate families showing up to their council’s doorstep for help. Private providers are cashing in on this crisis, charging eyewatering sums for rooms where children are forced to eat, sleep and do their homework on beds shared with siblings.”

Out of the £2.8bn, £844m was spent on housing people in emergency B&Bs and hostels, considered the worst type of temporary accommodation for families.

Meanwhile, more than £1bn was spent on nightly paid, self-contained accommodation, making up 40% of the total temporary accommodation cost. The total spend on this privately managed accommodation increased by 79% in the space of a year.

John Glenton, chief care and support officer at Riverside housing association, said: “During the past financial year the number of homeless children living in temporary accommodation (TA) in England overtook the population of Oxford. 

“Spending £2.8bn a year on temporary accommodation, and more than £10bnover five years, shows the immense and unsustainable cost councils are facing.

“However, this spending does not show the immense toll that living in TA has on families who are often forced to share beds, and live in one single room without kitchen facilities, leaving families deprived of sleep and the ability to make a warm, healthy meal.”

Read more:

• Homelessness system in Scotland ‘at breaking point’ as rough sleeping surges
• Number of children in temporary accommodation in England hits new record high
• Giving homeless people stable housing could save taxpayer £200m a year – if Labour wants to

Labour has pledged to spend £1bn on tackling homelessness and rough sleeping over the year, including a shift towards prevention and a pilot scheme to reduce the use of emergency B&Bs where they are most prevalent.

Glenton said that this has had an impact and has cut the number of families living in B&Bs by 30% but there is a long way to go to reduce record-high homelessness.

The figures also show the challenge for councils to shift towards preventing homelessness while facing huge costs in supporting people who are already homeless.

The government has also introduced mandatory housebuilding targets for local authorities in a bid to deliver its promise to deliver 1.5 million homes while in power.

Glenton added: “If it is going to reduce homelessness, we need to see a significant and sustained increase in new social housing and dedicated ring-fenced funding spent on homelessness services and supported housing.”

The figures are also a stark reminder that there is a human cost, as well as a financial one, to rising homelessness and use of temporary accommodation.

Louisa, a Big Issue vendor with experience of living in temporary accommodation, said: “Previously I was in temporary accommodation in a shared house. It wasn’t good because there were people with a lot of drugs and alcohol. Especially with two kids it was really difficult – we were hearing banging, screaming and fighting all the time.

“Now I close my door and nobody can come in – it’s my own house, I feel safe there – but not everyone can afford this. I’m worried the government is not taking enough action for those who are really in need.”

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