Research released today reveals the depth of the homelessness crisis in England, with council spending on the most unsuitable forms of emergency accommodation now projected to reach £1.2bn within three years.
The new research, conducted by researchers from LSE and commissioned by the charity Crisis, indicates that approximately 56,000 households stayed in hostels, B&Bs and other nightly-paid accommodation in 2023/24 in England. The net expenditure for this emergency accommodation totalled £732 million, a more than fivefold increase from the £135 million spent in 2017-18. This accounted for the majority (69%) of overall net expenditure on temporary accommodation by Local Authorities in 2023-24.
If the use of emergency accommodation continues its current trajectory, the researchers project that 68,700 households will be forced into the most unsuitable emergency accommodation by 2026/27, requiring a net expenditure from councils of £1.2 billion. This is a 63% increase over three years, when current spending is already at a record high.
The research comes as Crisis hosts a summit in London (Tuesday 25 February) seeking to raise ambition and platform solutions for ending homelessness. Last year the Westminster government pledged to introduce a cross-government strategy to ‘put Britain back on track to ending homelessness’. Crisis’ summit is hosting speakers from across government, parliament, councils and civil society – including Homelessness Minister Rushanara Ali MP, Mayor of Greater Manchester Andy Burnham and housing campaigner Kwajo Tweneboa – before ministers publish their strategy later this year.
The LSE research also indicated that the productivity losses associated with emergency accommodation in 2023/24 were estimated at £733 million, showing the substantial impact on households trapped in emergency accommodation and the wider economy. LSE found that diverting 25% of the current spend on emergency accommodation to prevention services would have a positive return on investment within a year. For every £1 spent on prevention, the researchers found a minimum £1.32 return is estimated in the first year. [1]
Homelessness is increasing across the country. There are now more than 120,000 households living in all forms of temporary accommodation in England, including nearly 160,000 children. Temporary accommodation is frequently cramped or dangerous. Official data recently revealed that temporary accommodation had contributed to the deaths of at least 74 children over the past five years. Rough sleeping rates are reaching record levels in some areas. Last year saw a 27% increase in England, with more than 4,600 people seen sleeping rough in London between October and December.
Since July 2024 the new Westminster government has pledged a generational increase in new social and affordable housing, amid a wider goal to build 1.5million new homes. Earlier this month ministers pledged £350m for affordable and social rent homes, further to a £500m boost to the Affordable Homes Programme last October.
Ahead of the publication of the Westminster government’s strategy, Crisis is calling on ministers to:
address plummeting rates of social housebuilding by supporting the building of 90,000 new social homes per year in England [2]
unfreeze local housing allowance (LHA) so it consistently covers at least the lowest 30% of local rents
lift the temporary accommodation subsidy cap – frozen since 2011 – to ensure that councils are able to support people into good quality temporary accommodation.
Matt Downie, chief executive of Crisis, said: “The current system is broken. With a lack of social housing and limited funding for prevention services, councils are being forced to spend millions on often cramped, mouldy and unsuitable emergency accommodation. This becomes a bill for keeping people homeless, in limbo, robbing them of their potential and denying children their childhoods.
“In the next few months, the Westminster government has a once in a generation opportunity to build a future free from homelessness. With an ambitious government strategy, ministers can drive the delivery of genuinely affordable housing, and they should pull every lever available to them, including keeping local housing allowance in line with the lowest local rents.”
Mayor of Greater Manchester, Andy Burnham, said: “The safety and security of a good home is necessary for anyone to thrive. The research published today by Crisis and LSE shows the reality of the housing crisis in England and the pressure this places on families, individuals and the local authorities supporting them.
“We’ve been calling for the housing crisis to be tackled head on in Greater Manchester for some time, so we’re pleased to support the research Crisis and LSE have carried out. The only solution we have of fixing this shortfall is by building a supply of truly affordable, social and council housing. That’s why, in Greater Manchester, we’re putting housing first and aiming to tackle the root causes of the housing crisis.
“I’m glad that the government has invested £47million into homelessness services in Greater Manchester, backing our efforts to deal with this urgent issue. Our own research in Greater Manchester mirrors the findings of this report, with estimates showing that we’re spending at least £75million every year on renting temporary accommodation across the region, and we only get 42% of that back via housing benefit. This drain on local government finances is unsustainable.
“We fully support efforts to build the homes we truly need to end the housing crisis and we’re ready to deliver in Greater Manchester and provide a healthy home for all by 2038.”
Tom Copley, the Deputy Mayor of London for Housing and Residential Development, said: “The rising number of people experiencing homelessness in our capital and across the country will take time to turn around. With council spending on emergency accommodation set to rise to £1.2bn in the next three years, and one child in every London classroom already living in temporary accommodation, there is simply no time to waste.
“The Mayor is doing everything in his power to help Londoners off the streets and into more secure accommodation, including delivering a record £10 million to expand the number of Ending Homelessness Hubs across the capital – a bigger single investment than any London Mayor. He has also quadrupled City Hall’s rough sleeping budget since 2016, supporting over 18,000 people off the streets to date, and has got more council homes underway in London than in the rest of the country put together.
“Sadiq is committed to his mission of ending rough sleeping in the capital by 2030. Delivering this will be a team effort between local, London, national government and the homelessness sector as we continue to build a fairer London for everyone.”
