Performance Tracker 2025: Homelessness

The Labour government inherited a system for supporting those who are homeless that is both financially unsustainable and failing those it is meant to help. Real-terms spending on homelessness has more than doubled since 2010, reaching £3.8bn in 2024/25. The number of households in temporary accommodation, much of it unsuitable, has hit a record high. Local authorities are buckling under the financial strain, with many reporting it as a key concern to their financial viability alongside adult and children’s social care. But most importantly, more and more people are experiencing homelessness, at a rate that exceeds population growth, severely affecting their quality of life and prospects for the future.

Instead of letting this continue, the government needs to fundamentally rethink its approach. It has already taken some steps in the right direction, by starting to ring- fence funding for prevention and boosting investment in social and affordable housing to tackle the root causes of homelessness.

The government’s forthcoming homelessness strategy must mark a clear break from the crisis-led model that currently dominates. That means defining what ‘prevention’ looks like in practice and setting out how services will work together – not in silos – to deliver it. It also means equipping local authorities with the analytical tools they need to anticipate demand and plan more effectively.

Spending on homelessness is soaring and local authorities are shouldering more of the cost

Local authorities spent £3.8bn^* tackling homelessness in 2024/25,^{**, 255} Ministry of Housing, Communities and Local Government, ‘Local authority revenue expenditure and financing in England: 2024 to 2025 individual local authority data - outturn’, GOV.UK, 18 September 2025, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2024-to-2025-individual-local-authority-data-outturn  more than double the £1.4bn spent in 2009/10 (both in 2025/26 prices). ²⁵⁶ Ibid.  Over 80% (or £2bn) of that increase has come in the last seven years alone, driven in part by the introduction of the Homelessness Reduction Act (HRA) in 2018. This extended councils’ statutory homelessness duties to support a wider range of households^*** and intervene earlier.^{****, 257} The Homelessness Reduction Act 2017. Available at: www.legislation.gov.uk/ukpga/2017/13 (Accessed: 12 September 2025).  Other factors, such as rising demand and the growing cost of temporary accommodation (both explored below), have also likely contributed.

As homelessness spending has risen, councils have had to shoulder more of it themselves. Councils are partially reimbursed by central government for temporary accommodation expenses via a subsidy for the housing benefit they pay up front. ²⁵⁸ Biswas D, Stavridou M and Potluri A, The local housing allowance rate and temporary accommodation reimbursement process , BisImpact, 5 December 2024, www.local.gov.uk/publications/local-housing-allowance-rate-and-temporary-accomodation-reimbursement-process#how-the-temporary-accommodation-reimburse…  But for most types of temporary accommodation, the amount of subsidy councils can reclaim is still based on 2011 rent levels. ²⁵⁹ Wilkins M, Gray T and Reeder N, Spending on Temporary Accommodation: Is it Value for Money? , Centre for Homelessness Impact, October 2024, www.homelessnessimpact.org/publication/spending-on-temporary-accommodation-value-for-money  As market rents have risen, and temporary accommodation costs have risen even faster, the real value of this subsidy has been eroded. As a result, councils’ share of temporary accommodation^***** expenses has jumped from 7.1% in 2009/10 to 50.6% in 2024/25. ²⁶⁰ Ministry of Housing, Communities and Local Government, ‘Local authority revenue expenditure and financing in England: 2024 to 2025 individual local authority data - outturn’, GOV.UK, 18 September 2025, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2024-to-2025-individual-local-authority-data-outturn; Ministry of Housing, Communities and Local Government, ‘Local authority revenue expenditure and financing in England: 2009 to 2010 final outturn (revised)’, GOV.UK, 27 January 2011, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-in-england-2009-to-2010-final-outturn-revised

What was once a modest line in council budgets has ballooned into a major financial pressure. In 2009/10, councils spent just £70.3m (net) on temporary accommodation. ²⁸¹ Ministry of Housing, Communities and Local Government, ‘Local authority revenue expenditure and financing in England: 2009 to 2010 final outturn (revised)’, GOV.UK, 27 January 2011, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-in-england-2009-to-2010-final-outturn-revised  By 2024/25, the figure had grown in real terms by more than a factor of 19, to at least^****** £1.3bn. ²⁸² Ministry of Housing, Communities and Local Government, ‘Local authority revenue expenditure and financing in England: 2024 to 2025 individual local authority data - outturn’, GOV.UK, 18 September 2025, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2024-to-2025-individual-local-authority-data-outturn; Ministry of Housing, Communities and Local Government, ‘Local authority revenue expenditure and financing in England: 2023 to 2024 individual local authority data - outturn’, GOV.UK, 29 August 2024, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2023-to-2024-individual-local-authority-data-outturn  The rise has been particularly sharp in the last two years: net spending increased by £658.2m, meaning it has almost doubled since 2022/23. ²⁸³ Ministry of Housing, Communities and Local Government, ‘Local authority revenue expenditure and financing in England: 2024 to 2025 individual local authority data - outturn’, GOV.UK, 18 September 2025, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2024-to-2025-individual-local-authority-data-outturn; Ministry of Housing, Communities and Local Government, ‘Local authority revenue expenditure and financing in England: 2009 to 2010 final outturn (revised)’, GOV.UK, 27 January 2011, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-in-england-2009-to-2010-final-outturn-revised

Some councils warn that homelessness now poses one of the biggest threats to their financial viability, alongside adult and children’s social care. While it accounts for less spending than the other two services, it is (like those others) statutory, demand-led, and under intense pressure from factors largely outside local control.

Two interviewees called for the freeze on temporary accommodation subsidy to be lifted, allowing councils to recover more of their costs from central government. ²⁸⁴ Institute for Government interviews.  While this would offer short-term financial relief, another interviewee warned that some landlords – knowing councils could now pay more – might raise temporary accommodation rents in response, redirecting the additional funding into their pockets. ²⁸⁵ Institute for Government interview.  This reportedly happened in 2024, following an increase in housing benefit rates. However, research from the University of Essex and the Institute for Fiscal Studies suggests that, at the national level, rents do not move much with changes to housing benefit. ²⁸⁶ Brewer M, Browne J, Emmerson C, Hood A and Joyce R, ‘The curious incident of rent subsidies: Evidence of heterogeneity from administrative data’, Journal of Urban Economics , 2019, vol. 114, www.sciencedirect.com/science/article/pii/S0094119019300750#sec0002  If such a change did help local authority budgets, it would ultimately transfer the same costs on to central government, unless local authorities reinvested their savings into developing a more cost-effective stock of temporary accommodation.

The rising spend on temporary accommodation is crowding out prevention, undermining efforts to tackle the root causes of homelessness.^******* In 2023/24, for example, 49% of the Homelessness Prevention Grant (HPG) – set up in 2021 to bring together funding streams in aid of prevention agendas – was used by local authorities to cover some of the costs of temporary accommodation. ²⁸⁷ Ministry of Housing. Communities and Local Government, ‘Homelessness Prevention Grant 2025-26: technical note’, GOV.UK, 18 December 2024, www.gov.uk/government/publications/homelessness-prevention-grant-allocations-2025-to-2026/homelessness-prevention-grant-2025-26-technical-note

In response, the current government has ring-fenced 49% of the HPG for 2025/26, stopping it from being spent on temporary accommodation. ²⁸⁸ Ibid.  While this signals a welcome commitment to prevention, it is unlikely on its own to drive a meaningful shift. At the national level, local authorities will still be able to spend a greater proportion of the HPG on temporary accommodation in 2025/26 than they did in 2023/24. Individual councils that previously allocated more than 51% of their grant to temporary accommodation will now need to scale back. However, one interviewee warned that some may simply re-label activities – such as tenancy support or welfare advice – that are currently financed through other funding streams, presenting them instead as prevention under the HPG. ²⁸⁹ Institute for Government interview.  This would amount to an accounting change, not a genuine shift in practice.

Another barrier is that ‘prevention’ remains loosely defined. At a recent roundtable hosted by the Institute for Government and the Centre for Homelessness Impact, local authorities noted that, in practice, prevention often takes the form of rent subsidies to keep households in their homes. This is not truly upstream.

From 2026/27, Labour plans to go further, rolling all homelessness and rough sleeping revenue grants – including the HPG – into a single funding pot, while creating a separate stream for temporary accommodation. ²⁹⁰ Ministry of Housing, Communities and Local Government, ‘The Fair Funding Review 2.0’, GOV.UK, 20 June 2025, www.gov.uk/government/consultations/the-fair-funding-review-20  This aims to end “the current tension that forces local authorities to choose between investment in prevention and meeting current temporary accommodation costs” and should “enable local authorities to plan and deliver services more efficiently and prioritise prevention”. ²⁹¹ Ibid.  This is another positive step, but, like the ring-fence, its success will depend on how prevention is defined and implemented in practice.

_{* This includes spending by the Greater London Authority and combined authorities for completeness. Local authorities account for the vast majority (99% in 2024/25) of this amount.}

_{** This does not include the cost of accommodating asylum seekers. This is the responsibility of the Home Office rather than local government.}

_{*** Until April 2018, councils were only required to support households in ‘priority need’ – for example, those containing a child, a pregnant woman, someone at risk of abuse, or a young care leaver. The HRA expanded this to all eligible applicants,} ²⁹² Ministry of Housing, Communities and Local Government, 'Homelessness code of guidance for local authorities', GOV.UK, 22 February 2018, retrieved 25 September 2025, https://www.gov.uk/guidance/homelessness-code-of-guidance-for-local-authorities/chapter-7-eligibility-for-assistance  _{where eligibility is based on immigration and residence status in the UK. For example, people subject to immigration control or not habitually resident in the Common Travel Area are not eligible for housing assistance, with some exceptions. Other ineligibility criteria also apply. But councils are still not required to permanently house homeless applicants who are not in priority need.}

_{**** Since the HRA came into force, anyone who is considered likely to become homeless within 56 days is classed as ‘threatened with homelessness’, twice the previous threshold of 28 days. Councils are legally required to take ‘reasonable steps’ to prevent homelessness among all eligible applicants in this category.}

_{***** This excludes temporary accommodation admin costs, which were not reported separately from other admin
costs until 2020/21,} ²⁹³ Department for Levelling Up, Housing and Communities, 'Local authority revenue expenditure and financing England: 2020 to 2021 final outturn', GOV.UK, 27 January 2022, https://www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2020-to-2021-final-outturn  _{to maintain consistency over time.}

_{****** The Centre for Homelessness Impact finds that spending on temporary accommodation is likely to be under-reported.} ²⁹⁴ Wilkins M, Gray T and Reeder N, Spending on Temporary Accommodation: Is it Value for Money? , Centre for Homelessness Impact, October 2024, www.homelessnessimpact.org/publication/spending-on-temporary-accommodation-value-for-money  _{Some councils record no cost when using their own stock as temporary accommodation, or report no temporary accommodation spending at all despite indicating its use in other data returns.}

_{******* Previous Institute for Government research finds that this often happens when budgets are tight.}

Unprecedented growth in demand, particularly in London and the North East, has caught local authorities off guard

Since the HRA came into force, lower-tier local authorities have been required to take ‘reasonable steps’ to help eligible^* applicants and their households:^**

• avoid homelessness^*** if they are at risk of experiencing it within 56 days (the prevention duty)
• secure suitable accommodation if they are homeless (the relief duty). ²⁹⁵ Greaves F and Barton C, Statutory homelessness (England): The legal framework and performance , House of Commons Library, 30 July 2024, https://researchbriefings.files.parliament.uk/documents/SN01164/SN01164.pdf; Housing Act 1996, c. 52. Available at: www.legislation.gov.uk/ukpga/1996/52/part/VII (Accessed: 12 September 2025).

We use the rolling four-quarterly average of households owed prevention or relief duties^**** to gauge demand on local authority homelessness services. Two interviewees cautioned that while this may be the best available measure, it is not entirely reliable, pointing to examples of councils where limited service opening hours and low staffing levels had suppressed the number of duties owed. ²⁹⁶ Institute for Government interviews.

In April to June 2019, there were 69,555 prevention or relief duties in England.^{*****, 297} Ministry of Housing, Communities and Local Government, ‘Statutory homelessness England level time series “live tables”’, GOV.UK, 22 July 2025, www.gov.uk/government/statistical-data-sets/live-tables-on-homelessness  After a dip in the first year of the pandemic – largely due to emergency measures such as the restriction on private rented sector evictions ²⁹⁸ Ministry of Housing, Communities and Local Government, Statutory Homelessness Annual Report 2020-21 , England, GOV.UK, 9 September 2021, https://assets.publishing.service.gov.uk/media/6138c292e90e070438c9455c/Annual_Statutory_Homelessness_2020-21.pdf  – demand steadily mounted. By July to September of 2024, it had reached a record 84,285 duties,^****** a 21% increase on initial levels. ²⁹⁹ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness England level time series “live tables”’, GOV.UK, 22 July 2025, www.gov.uk/government/statistical-data-sets/live-tables-on-homelessness  One local authority leader described the rise as a “tsunami of demand”. ³⁰⁰ Institute for Government interview.

Several local authority leaders acknowledged being caught off guard by this. ³¹⁰ Roundtable run by the Institute for Government and Centre for Homelessness Impact.  As outlined in a recent report from the Institute for Government and the Centre for Homelessness Impact, councils need more robust and timely data to keep pace with change. One interviewee also stressed that many local authorities lack the forecasting capability to plan ahead, arguing that investment in analytical capacity should be a top priority for improving value for money. ³¹¹ Institute for Government interview.  Manchester, Bournemouth, Christchurch and Poole, and Hastings were highlighted as examples of councils making good use of data to guide decisions. ³¹² Institute for Government interview.

In the last two quarters for which data is available, demand has fallen, reaching 82,363 at the start of 2025. ³¹³ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness England level time series “live tables”’, GOV.UK, 22 July 2025, www.gov.uk/government/statistical-data-sets/live-tables-on-homelessness  One interviewee suggested that this could reflect the gradual unwinding of demand built up from Covid and the height of the cost of living crisis. ³¹⁴ Institute for Government interview.  Even so, 3.4 households per 1,000 are now assessed as homeless or threatened with homelessness every quarter – still well above the 3.0 recorded in April to June 2019. ³¹⁵ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness England level time series “live tables”’, GOV.UK, 22 July 2025, www.gov.uk/government/statistical-data-sets/live-tables-on-homelessness

Demand has not risen evenly across the country since 2019. In London and the North East, nearly one additional household per 1,000 is now assessed as owed a duty compared to April to June 2019 (0.9 in London, 0.8 in the North East). ³¹⁶ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness statistics’, GOV.UK, 22 July 2025, www.gov.uk/government/collections/homelessness-statistics#statutory-homelessness  The most dramatic growth has been in the London borough of Islington, where the rate has risen by 4.2 households per 1,000 – a 163% increase. ³¹⁷ Ibid.  By contrast, demand has stayed constant in the East Midlands and has even fallen in some areas, most sharply in Thanet in the South East, where the rate has dropped by 2.5 households per 1,000 (a 44% decrease). ³¹⁸ Ibid.

As a result, homelessness is now more unevenly distributed than in 2019.^******* In London, nearly five in every 1,000 households was assessed as owed a duty at the start of 2025. ³²⁸ Ibid.  At the extremes, this figure reached 7.7 in Newham, compared to just 0.7 in Ribble Valley in the North West – meaning households in Newham were more than 11 times more likely to be assessed as homeless or at risk of homelessness. ³²⁹ Ibid.

_{* Based on their immigration and residence status in the UK.} ³³⁰ Ministry of Housing, Communities and Local Government, 'Homelessness code of guidance for local authorities', GOV.UK, 22 February 2018, retrieved 25 September 2025, https://www.gov.uk/guidance/homelessness-code-of-guidance-for-local-authorities/chapter-7-eligibility-for-assistance  _{For example, people subject to immigration control or who are not habitually resident in the Common Travel Area are not eligible for housing assistance, with some exceptions. Other ineligibility criteria also apply.}

_{** Households can consist of only one adult, or may include one or more adults with dependent children, or one or more adults without dependent children.}

_{*** The statutory definition of homelessness (under section 175 of the Housing Act 1996} ³³¹ The Housing Act 1996. Available at: https://www.legislation.gov.uk/ukpga/1996/52/section/175 (Accessed: 8 October 2025). _{) covers people who have no accommodation that they have a legal right to occupy, they (and their household) can access, or would be reasonable for them to continue to occupy.}

_{**** Every figure in this chapter that refers to the number of relief or prevention duties experienced by England, a region, or a local authority is a four-quarterly rolling average, up to and including the quarter mentioned, unless explicitly stated otherwise. This helps smooth out seasonal fluctuations in homelessness, making trends easier to compare over time.}

_{***** Duties are owed to households, which in around half of cases consist of only one person, but often involve more than one person. Although data on prevention and relief duties was first published in Q2 2018, data quality in that quarter was particularly poor as local authorities adjusted to new reporting requirements. For this reason, the earliest rolling average we report spans Q3 2018 to Q2 2019.}

_{****** Prevention or relief duties only.}

_{******* The interquartile range was 1.7 households per 1,000 in April to June 2019, but 2.1 in January to March 2025. The Isles of Scilly and City of London are excluded from this calculation.}

Homelessness support has become more crisis-led, partly because of poor co-ordination between public services

Homelessness support has tipped sharply away from prevention and towards crisis relief. Before the pandemic, prevention duties outnumbered relief duties. ³³² Ministry of Housing, Communities and Local Government, ‘Statutory homelessness in England: April to June 2019’, GOV.UK, 18 December 2019, www.gov.uk/government/statistics/statutory-homelessness-in-england-april-to-june-2019  But that changed in mid-2020, as emergency pandemic measures led to a sharp drop in prevention activity. While those protections have long since ended, prevention duties have yet to fully rebound. ³³³ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness in England: January to March 2025’, GOV.UK, 22 July 2025, www.gov.uk/government/statistics/statutory-homelessness-in-england-january-to-march-2025/statutory-homelessness-in-england-january-to-march-2025

The growth in demand since 2019 has come entirely from people assessed as already homeless, rather than at risk of it. By early 2025, for every five households offered support once already homeless, only around four were supported earlier to avoid it. ³³⁴ Ibid.  This is a reversal of the ratio seen in mid-2019, when prevention led relief by a similar margin. ³³⁵ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness in England: April to June 2019’, GOV.UK, 18 December 2019, www.gov.uk/government/statistics/statutory-homelessness-in-england-april-to-june-2019  Some councils have an even starker imbalance: in Liverpool, Nuneaton and Bedworth, Sefton and West Lancashire, there are now more than four relief duties for every prevention duty. ³³⁶ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness in England: January to March 2025’, GOV.UK, 22 July 2025, www.gov.uk/government/statistics/statutory-homelessness-in-england-january-to-march-2025/statutory-homelessness-in-england-january-to-march-2025

One driver of this shift may be a rise in ‘hard-to-prevent’ causes of homelessness – those where early intervention often depends on co-ordinated action from other public services. An increasing share of homelessness duties are linked to people leaving asylum accommodation or institutional settings (such as custody or hospital). ³³⁹ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness England level time series “live tables”’, GOV.UK, 22 July 2025, www.gov.uk/government/statistical-data-sets/live-tables-on-homelessness  The increase in these duties between Q2 2019 and Q1 2025 is equal to nearly half (48%) of the overall increase in homelessness duties over that period. ³⁴⁰ Ibid.

That so many relief, rather than prevention, duties are issued to people after leaving government-run settings like asylum accommodation or prisons is an indictment of public service co-ordination. One of the clearest failures came in August 2023, under the Sunak government, when the Home Office effectively shortened many peoples’ notice period to leave asylum accommodation from 28 days to just seven. ³⁴⁴ Butler P, Gecsoyler S and Goodier M, ‘Home Office reverses policy on UK hostel evictions after surge in refugee homelessness’, The Guardian, 21 December 2023, www.theguardian.com/uk-news/2023/dec/21/home-office-reverses-policy-on-uk-hostel-evictions-after-surge-in-refugee-homelessness  Over the next few months, relief duties linked to asylum exits quadrupled.^* The Home Office reversed the policy in December 2023 ³⁴⁵ Ibid.  and demand began to ease the following quarter.^{**, 346} Ministry of Housing, Communities and Local Government, ‘Statutory homelessness England level time series “live tables”’, GOV.UK, 22 July 2025, www.gov.uk/government/statistical-data-sets/live-tables-on-homelessness

In December 2024, the new government introduced a pilot scheme doubling the notice period to 56 days. ³⁶³ Fenwick J, ‘Home Office to give refugees more time to find housing’, BBC News, 5 December 2024, www.bbc.co.uk/news/articles/cx27npv58nno  This overlaps more with the typical 35-day wait for processing Universal Credit applications ³⁶⁴ GOV.UK, ‘Universal Credit’, GOV.UK, (no date) retrieved 12 September 2025, www.gov.uk/universal-credit/how-youre-paid  and councils’ 56-day prevention duty. Too little data exists to draw firm conclusions on the effect of this change, but by early 2025^*** prevention cases accounted for 32% of duties owed to households leaving asylum accommodation – the highest share since mid-2023. ³⁶⁵ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness England level time series “live tables”’, GOV.UK, 22 July 2025, www.gov.uk/government/statistical-data-sets/live-tables-on-homelessness  But in August, the government scrapped the pilot for single adults to speed up asylum decisions, ³⁶⁶ Taylor D, ‘Home Office plans to halve time asylum seekers given to find accommodation’, The Guardian, 27 August 2025, www.theguardian.com/uk-news/2025/aug/27/charities-warn-rise-rough-sleeping-refugees-winter-uk  illustrating how easily progress in one area can be sacrificed to meet immediate pressures in another.

The shift away from prevention has serious human and financial costs. People are far better off if help arrives before they lose their homes, sparing them intense distress and disruption. And evidence suggests prevention is far more cost-effective. Research by the UK homelessness charity Crisis estimated the up-front costs of preventing homelessness as 2.5–14 times lower than the cost of supporting someone for a year after they become homeless, depending on the individual’s circumstances. ³⁶⁷ Pleace N, At what cost? An estimation of the financial costs of single homelessness in the UK , Crisis, July 2015, www.crisis.org.uk/media/237022/costsofhomelessness_finalweb.pdf

In its 2025 spending review, the government committed £100m (cash terms) to preventing homelessness and rough sleeping, most of which is planned for 2026/27 and 2027/28. ³⁶⁸ HM Treasury, Spending Review 2025 , CP 1336, The Stationery Office, 2025.  As demonstrated by the use of the HPG to cover temporary accommodation costs, this funding needs to be protected if it is to be spent on prevention.

While the government has yet to publish a detailed homelessness prevention agenda, one is expected as part of its homelessness strategy due this autumn. It is clear that an effective approach to homelessness prevention must be rooted in targeted, collaborative action across all public services. Embedding this approach in its new strategy should be a key priority.

_{* This uses unadjusted data (instead of a four-quarterly rolling average) to avoid introducing a lag on detecting turning points.}

_{** This uses unadjusted data (instead of a four-quarterly rolling average) to avoid introducing a lag on detecting turning points. The number of relief duties linked to asylum exits from: Q4 2023 is 3.8 times higher than from Q4 2022; Q1 2024 is 3.6 times higher than from Q1 2023; and Q2 2024 is 3.1 times higher than from Q2 2023.}

_{*** This uses unadjusted data (instead of a four-quarterly rolling average) to avoid introducing a lag on detecting turning points.}

The Renters’ Rights Bill and the Supported Housing Act risk exacerbating homelessness in the short term

Two major pieces of legislation are expected to reshape the housing landscape over the coming years. The Renters’ Rights Bill, designed to provide renters with greater security and stability, will introduce tighter regulation of the private rented sector. ³⁶⁹ Ministry of Housing, Communities and Local Government, ‘Guide to the Renters’ Rights Bill’, GOV.UK, 16 January 2025, www.gov.uk/government/publications/guide-to-the-renters-rights-bill/guide-to-the-renters-rights-bill  Among other measures, it will abolish ‘no-fault’ evictions for private landlords – which currently allow them to evict tenants without providing a reason – and establish a new private rented sector landlord ombudsman to resolve tenant complaints. ³⁷⁰ Ibid.  The bill is expected to be enacted at the end of 2025.

The Supported Housing (Regulatory Oversight) Act shares a similar purpose: to raise standards in a part of the housing system that is perceived to lack effective oversight. It gives the secretary of state powers to introduce a licensing regime for supported housing – a range of accommodation where residents receive care or support to live independently. ³⁷¹ Ministry of Housing, Communities and Local Government and Department for Work and Pensions, ‘Supported Housing regulation: consultation’, GOV.UK, 20 February 2025, www.gov.uk/government/consultations/supported-housing-regulation-consultation/supported-housing-regulation-consultation  The Act was motivated by growing concerns that exemptions from housing benefit subsidy caps were being exploited by some providers, who were keeping the additional funding as profit rather than using it to support residents. ³⁷² Wilson W, The Supported Housing (Regulatory Oversight) Act 2023: debate in parliament, House of Commons Library, 7 September 2023, https://commonslibrary.parliament.uk/research-briefings/cbp-9668/  While the Act was passed by the Sunak government in 2023, it is not yet in force and the current government consulted earlier this year on how its measures should be implemented. ³⁷³ Ministry of Housing, Communities and Local Government and Department for Work and Pensions, ‘Supported Housing regulation: consultation’, GOV.UK, 20 February 2025, www.gov.uk/government/consultations/supported-housing-regulation-consultation/supported-housing-regulation-consultation

Although the homelessness sector supports the intent behind both pieces of legislation, there are growing concerns that they may exacerbate homelessness in the short term. ³⁷⁴ Institute for Government interviews.  In particular, there are signs that some landlords are exiting both the private and supported housing markets before the new rules come into force, contributing to rising levels of homelessness. ³⁷⁵ Institute for Government interviews.

A lot of uncertainty remains over the impact these pieces of legislation will have. One local authority director of homelessness expressed fear that the government seemed to “be going very rapidly big bang”, and were not taking enough time to transition landlords or trial the new rules to understand the unintended consequences. ³⁷⁶ Institute for Government interviews.

Households experiencing, or at risk of, homelessness may have a growing number of needs

Many people experiencing, or at risk of, homelessness have additional support needs, such as being a care leaver, or having a disability or mental health condition. Over the past six years, the share of households owed a duty with at least one identified support need has steadily increased, rising from 45% in 2019 to 58% by early 2025.^{*, 377} Ministry of Housing, Communities and Local Government, ‘Statutory homelessness England level time series “live tables”’, GOV.UK, 22 July 2025, www.gov.uk/government/statistical-data-sets/live-tables-on-homelessness  Support needs are now more common than not, with nearly four recorded for every three households owed a duty.^{**, 378} Ibid.

While needs are now identified across a much broader spread of households, the severity in individual cases has increased only modestly. Among households with at least one support need, the average number has increased from 2.1 to 2.3^*** between 2019 and 2025. ³⁸⁶ Ibid.

At least part of the overall increase stems from more complete reporting. In 2019, 2.7% of households had support needs recorded as ‘unknown’; by 2025, that figure had dropped to just 0.1%. ³⁸⁷ Ibid.  The extent to which underlying need has also grown is less clear, and the picture may well differ across the country. One interviewee was sceptical that underlying needs had increased, but another recounted a clear escalation, describing the “tragedy upon tragedy” that now faces many people presenting as homeless. ³⁸⁸ Institute for Government interviews.  Where rising needs were observed, they were generally attributed to growing gaps in support elsewhere, especially in stretched services like special educational needs. ³⁸⁹ Institute for Government interviews.

_{* This – like all figures on support needs in this section – uses a rolling four-quarterly average to smooth out seasonal fluctuations. Two new support need categories (difficulties budgeting and being a victim of modern slavery) were added in April 2022, which may have contributed to the rise in recorded needs. If these are excluded and it is assumed that households with these needs had no others, the proportion rises more modestly, from 45% to 52%.}

_{** In other words, there were 1.32 support needs for every household owed a duty in January to March 2025. Even when excluding the two support need categories introduced in 2022 (as mentioned in the previous footnote), the figure remains elevated at 1.27 – still a marked increase from 0.94 in April to June 2019.}

_{*** If you exclude the support needs that were added in 2022 (as mentioned in the previous two footnotes), that figure becomes 2.4, which is a more significant increase on the 2.1 recorded in April to June 2019.}

The number of households in temporary accommodation has reached record levels

While homeless households wait for their application to be processed and to be offered a settled home, they live in temporary accommodation – often hotels, bed and breakfasts and short-let flats that are unsuitable as permanent homes. Use of these arrangements has surged. The number of households living in temporary accommodation has hit record highs every quarter for the last two and a half years, reaching 131,140 at the start of 2025. ³⁹⁰ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness England level time series “live tables”’, GOV.UK, 22 July 2025, www.gov.uk/government/statistical-data-sets/live-tables-on-homelessness  This marks a 156% increase from the same quarter in 2010, when the figure stood at just 51,310. ³⁹¹ Ibid.  Today, around 5.4 households per 1,000 in England (0.5%) are living in temporary accommodation. ³⁹² Ibid.

These settings frequently fall far below acceptable standards. According to a 2023 survey by the UK homelessness charity Shelter, three quarters of households in temporary accommodation reported living in poor conditions, with one in five exposed to safety hazards such as faulty wiring or fire risks. ⁴¹⁹ Garvie D, Pennington J, Rich H and Schofield M, Still Living in Limbo: Why the use of temporary accommodation must end, Shelter, March 2023, https://england.shelter.org.uk/professional_resources/policy_and_research/policy_library/still_living_in_limbo  More than two thirds lack adequate access to basic facilities, like somewhere to cook or do laundry. ⁴²⁰ Ibid.

Temporary accommodation is never meant to be a permanent home and life there is profoundly unstable, often with weak protections against eviction. ⁴²¹ Ministry of Housing, Communities and Local Government, ‘Homelessness code of guidance for local authorities’, GOV.UK, 18 July 2025, www.gov.uk/guidance/homelessness-code-of-guidance-for-local-authorities  Yet its growing use reflects not only rising levels of homelessness, but also the increasing length of time people are spending there;^* 22.4% of households with children in temporary accommodation stay for more than five years compared to 20.6% who stay for less than six months. ⁴²² Ministry of Housing, Communities and Local Government, ‘Statutory homelessness in England: January to March 2025’, GOV.UK, 22 July 2025, www.gov.uk/government/statistics/statutory-homelessness-in-england-january-to-march-2025/statutory-homelessness-in-england-january-to-march-2025  Those figures are 14.9% and 34.1% for adult-only households.^{**, 423} Ibid.  Some households remain in temporary accommodation for over a decade. ⁴²⁴ Ibid.

This trend reflects a chronic shortage of permanent housing available to financially vulnerable people. One reason for this is the dwindling supply of social and affordable homes. Social housebuilding has been slow for decades, and many existing homes have been sold or demolished. ⁴²⁵ Muellbauer J, ‘Why social housing is crucial to the needed repairs of the UK’s failing economy’, in Shelter eds, Safe as Houses: Why Investment in Social Housing is Great for Us and Our Economy , Shelter, 31 March 2025, https://england.shelter.org.uk/professional_resources/policy_and_research/policy_library/safe_as_houses_why_investment_in_social_housing_is_great_for…  As a result, there has been a net loss of social housing in nearly every year since 1981. ⁴²⁶ Ibid.  The fraction of households in the social rented sector has halved over that period, from 32% to 16% in 2024. ⁴²⁷ Ibid.  Investing in new supply would likely be cost-effective. In 2022, the National Audit Office estimated that for every £1 invested in social housing, at least £2.70 is delivered in benefits. ⁴²⁸ Comptroller and Auditor General, The Affordable Homes Programme since 2015 , Session 2022-23, HC 652, National Audit Office, 2022, www.nao.org.uk/reports/the-affordable-homes-programme-since-2015/?nab=0

The crisis is most severe in London. Of the 25 councils with the highest rates of households in temporary accommodation, 19 are in the capital. ⁴²⁹ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness in England: January to March 2025’, GOV.UK, 22 July 2025, www.gov.uk/government/statistics/statutory-homelessness-in-england-january-to-march-2025/statutory-homelessness-in-england-january-to-march-2025  In Newham, 5.8% of households are in temporary accommodation – more than 10 times the national level. ⁴³⁰ Ibid.

This is driven both by the higher levels of homelessness in London and by the longer waits for a permanent home. As of early 2025, the average length of stay in temporary accommodation was three years and eleven months in London, three times longer than the average stay of one year and four months elsewhere.^*** One London borough told us that it now expects some children to spend their lives in temporary accommodation. ⁴³¹ Institute for Government interview.

There are early signs that the current government is confronting some of these structural drivers of homelessness. Three interviewees reported improved collaboration between local and central government in tackling the issues since Labour took office. ⁴³² Institute for Government interviews.  They described the Ministry of Housing, Communities and Local Government (MHCLG) as having a greater presence at regional meetings, adopting a less top-down approach, and ultimately taking a wider view of homelessness beyond rough sleeping. ⁴³³ Institute for Government interviews.  And the change in focus has been backed by major financial commitment: in its 2025 spending review, Labour committed £39bn over the next 10 years for a new Affordable Homes Programme (figures are cash terms). ⁴³⁴ HM Treasury, Spending Review 2025 , CP 1336, The Stationery Office, 2025.  This is the largest annual investment in affordable housing since 2011 (and that programme ran for a much shorter period of time). ⁴³⁵ Aref-Adib C, Housing Outlook Q2 2025 , Resolution Foundation, 11 July 2025, www.resolutionfoundation.org/publications/housing-outlook-q2-2025/  Sixty per cent of that funding will go towards homes for social rent. ⁴³⁶ Ministry of Housing, Communities and Local Government, ‘Government confirms plans for a social rent revolution’, press release, 2 July 2025, https://mhclgmedia.blog.gov.uk/2025/07/02/government-confirms-plans-for-a-social-rent-revolution/

Recent research from the Institute for Government and Centre for Homelessness Impact recommends that MHCLG explores a new tenure model for households needing lengthy homelessness assistance, which is of a good standard and offers greater stability to residents, especially families with children.

_{* Time series data on length of stays is limited, but there are widespread reports that stays have become longer as shortages of social and affordable housing have become more acute.}

_{** There is limited research on why adult-only households have a shorter average stay in temporary accommodation. One interviewee suggested two theories: that their homelessness duties are likely discharged more frequently, perhaps because they are deemed intentionally homeless or as not in priority need, and that it is likely easier to resettle these households.}

_{*** Length of stay data is missing for just under a quarter of London boroughs, and three non-London councils. These estimates account for only the local authorities with data. See the Methodology for details of the calculation.}

Temporary accommodation is increasingly unfit for purpose

Despite more households living there for longer, temporary accommodation is falling increasingly short of people’s needs. Soaring demand has left entire areas without suitable provision, forcing councils to place households far from their homes, support networks and jobs. At the start of 2010, 10.6% of households were placed in temporary accommodation out of their district – at the start of 2025, this was 31.7%. ⁴³⁷ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness England level time series “live tables”’, GOV.UK, 22 July 2025, www.gov.uk/government/statistical-data-sets/live-tables-on-homelessness  Nowhere is this pressure more acute than in London. According to one interviewee, a homeless household in Hackney will now likely be placed in Peterborough – at best. ⁴³⁸ Institute for Government interview.

With few alternative options available, local authorities are increasingly turning to bed and breakfasts (B&Bs) as temporary accommodation. B&Bs are notorious for having particularly poor living conditions – one interviewee called them “totally unsuited to purpose”. ⁴³⁹ Institute for Government interview.  They are often cramped and require households to share bathrooms and cooking facilities with strangers, making them particularly inappropriate for children. Recognising this, legislation prohibits councils from placing children in B&Bs except in an emergency, and even then for no longer than six weeks. ⁴⁴⁰ The Homelessness (Suitability of Accommodation) (England) Order 2003. Available at: www.legislation.gov.uk/uksi/2003/3326/article/2/made

Yet since the pandemic, breaches of this limit have become more common. Among households with children in temporary accommodation, the proportion living in B&Bs for longer than six weeks rose from 1.4% in mid-2018 to a peak of 4.8% in mid-2024. ⁴⁴¹ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness England level time series “live tables”’, GOV.UK, 22 July 2025, www.gov.uk/government/statistical-data-sets/live-tables-on-homelessness  Although this has since fallen to 2.8%, it remains well above pre-pandemic levels. ⁴⁴² Ibid.  As of 31 March 2025, 2,300 families with children were in B&Bs, and had lived there for longer than six weeks. ⁴⁴³ Ibid.  This problem is particularly pronounced in the West Midlands, where 10.4% of families with children in temporary accommodation are placed in B&Bs for longer than six weeks. ⁴⁴⁴ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness in England: January to March 2025’, GOV.UK, 22 July 2025, www.gov.uk/government/statistics/statutory-homelessness-in-england-january-to-march-2025/statutory-homelessness-in-england-january-to-march-2025

Increases in the rate of children living in temporary accommodation are associated with a higher likelihood that local authorities exceed the six-week legal limit, suggesting they are driven to make these B&B placements by acute supply pressures.^* But three interviewees cautioned against assuming councils’ hands are tied, pointing to significant variation in B&B use between areas that have similar housing markets and levels of demand. ⁴⁴⁸ Institute for Government interview.  According to them, political leadership plays a key role: some councils (such as Hastings and Manchester, discussed below) have made keeping children out of B&Bs a strategic priority, while others have not. ⁴⁴⁹ Institute for Government interviews.  The legal consequences for exceeding the six-week limit are apparently minimal – typically just a letter from central government ⁴⁵⁰ Institute for Government interview.  – leaving much of the decision making to local discretion.

_{* Regression 4.1. This is a two-way within (fixed effects) regression model, which examines how changes within each local authority over time in the rate of households with children in temporary accommodation are associated with changes within the same authority in the likelihood of those households exceeding the six-week limit in B&Bs. See the Methodology for further details.}

Temporary accommodation is increasingly expensive

Local authorities now use an increasingly expensive mix of temporary accommodation. B&Bs, the most expensive type, ⁴⁶⁰ Wilkins M, Gray T and Reeder N, Spending on Temporary Accommodation: Is it Value for Money?, Centre for Homelessness Impact, October 2024, www.homelessnessimpact.org/publication/spending-on-temporary-accommodation-value-for-money  now account for 12.0% of placements, up from just 3.8% in early 2009. ⁴⁶¹ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness England level time series “live tables”’, GOV.UK, 22 July 2025, www.gov.uk/government/statistical-data-sets/live-tables-on-homelessness  The most striking growth has been in nightly paid accommodation,^* which now houses 46,710 families, or 35.6% of the total. ⁴⁶² Ibid.  This is more than four times the proportion at the start of 2009 (7.8%), and up sharply from 27.5% just a year ago. ⁴⁶³ Ibid.  One homelessness director reported that the costs of nightly paid accommodation were “crippling” them. ⁴⁶⁴ Institute for Government interview.

The rising use of costly forms of temporary accommodation is largely driven by necessity: councils must house families to stop them sleeping rough but are rapidly running out of options. But this pressure has also weakened their bargaining power and, in some cases, opened the door to increased profit making. Council leaders described landlords shifting properties from the private rental market into nightly paid accommodation to maximise returns. ⁴⁶⁵ Roundtable run by the Institute for Government and Centre for Homelessness Impact; Institute for Government interviews.  Another interviewee pointed to offshore investors buying up B&Bs and profiting from their use as emergency housing. ⁴⁶⁶ Institute for Government interview.  And at a recent roundtable, local leaders reported that competition for these properties among various arms of government – such as the Home Office for asylum accommodation and His Majesty’s Prison and Probation Service for bail hostels – had also bid up prices.

The scarcity of suitable placements appears to have led to temporary accommodation becoming less cost effective. Since 2009/10, real-terms expenditure on temporary accommodation has risen by 176%, while the number of families housed has increased by only 129%. ⁴⁶⁷ Ministry of Housing, Communities and Local Government, ‘Local authority revenue expenditure and financing in England: 2024 to 2025 individual local authority data - outturn’, GOV.UK, 18 September 2025, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2024-to-2025-individual-local-authority-data-outturn; Ministry of Housing, Communities and Local Government, ‘Statutory homelessness England level time series “live tables”’, GOV.UK, 22 July 2025, www.gov.uk/government/statistical-data-sets/live-tables-on-homelessness  This gap is particularly striking given the shift in household composition: a greater proportion are now families without children, who are typically less expensive to accommodate. ⁴⁶⁸ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness England level time series “live tables”’, GOV.UK, 22 July 2025, www.gov.uk/government/statistical-data-sets/live-tables-on-homelessness  This divergence has largely emerged since the pandemic, which contributed to the sharp rise in demand that may have pushed councils towards more expensive placements.

A lack of financial oversight is a major barrier to more effective management of temporary accommodation. Councils’ capacity is often concentrated on meeting immediate front-line demand, leaving little space for strategic planning or financial scrutiny. One interviewee described how, in a council attempting to reform its homelessness services, the finance team had previously had no visibility of homelessness spending. ⁴⁸¹ Institute for Government interview.

The challenge is compounded by funding structures that can distort local incentives. ⁴⁸² Wilkins M, Gray T and Reeder N, Spending on Temporary Accommodation: Is it Value for Money?, Centre for Homelessness Impact, October 2024, www.homelessnessimpact.org/publication/spending-on-temporary-accommodation-value-for-money  Under the housing benefit subsidy system, some types of temporary accommodation are less costly to councils, even though they represent poor value for the taxpayer overall. ⁴⁸³ Ibid.  For example, hostels owned within a local authority’s general fund^** are exempt from housing benefit subsidy caps. ⁴⁸⁴ Ibid.  They can therefore attract much higher rates of reimbursement, making them a cost-effective option for local authorities but among the most expensive for central government and the public purse.

However, some councils have made meaningful progress. In Manchester and Hastings, for example, strategic efforts to reduce the use of B&Bs have yielded clear results. At the start of 2019, 9% of households in temporary accommodation in Manchester were in B&Bs;^*** in Hastings, it was 32%. ⁴⁸⁵ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness in England: January to March 2025’, GOV.UK, 22 July 2025, www.gov.uk/government/statistics/statutory-homelessness-in-england-january-to-march-2025/statutory-homelessness-in-england-january-to-march-2025  By the start of 2025, those figures had fallen to around 1% and 17% respectively, with only three households with children in B&Bs in Manchester and none in Hastings. ⁴⁸⁶ Ministry of Housing, Communities and Local Government, ‘Statutory homelessness in England: January to March 2025’, GOV.UK, 22 July 2025, www.gov.uk/government/statistics/statutory-homelessness-in-england-january-to-march-2025/statutory-homelessness-in-england-january-to-march-2025  Three interviewees mentioned the importance of political steer in making these reductions, with one describing it as essential. ⁴⁸⁷ Institute for Government interviews.  Another pointed to deliberate investment in analytical capacity, which enabled better long-term planning and resource allocation. ⁴⁸⁸ Institute for Government interview.

Manchester is leasing private rented sector accommodation to make up for much of the loss in B&B capacity, whereas Hastings is mostly using nightly paid, self-contained accommodation. ⁴⁸⁹ Institute for Government interviews; Ministry of Housing, Communities and Local Government, ‘Statutory homelessness in England: January to March 2025’, GOV.UK, 22 July 2025, www.gov.uk/government/statistics/statutory-homelessness-in-england-january-to-march-2025/statutory-homelessness-in-england-january-to-march-2025  Both have, however, recently started relying on council stock – Manchester by converting vacant council buildings to temporary accommodation, Hastings by acquiring around 100 new council properties using funding from the Levelling Up Partnership programme. ⁴⁹⁰ Institute for Government interviews.

In its spending review, Labour committed £950m (cash terms) of capital investment between 2026/27 and 2029/30, aimed at helping local authorities in England expand the supply of good-quality temporary accommodation and reduce reliance on the most expensive forms. ⁴⁹¹ HM Treasury, Spending Review 2025, CP 1336, The Stationery Office, 2025.  One interviewee suggested the government is also likely to introduce a target to end the use of B&Bs for families in its upcoming homelessness strategy. ⁴⁹² Institute for Government interview.  While it is promising that ministers are taking a more active interest in how money is spent on temporary accommodation, it is difficult to see how meaningful progress can be made without investment in, and political prioritisation by both central and local government of, local analytical capacity.

_{* Nightly paid, privately managed, self-contained accommodation, such as flats.}

_{** The main revenue account of a local authority.}

_{*** Manchester provided no reliable breakdown of the number of households it had in each type of temporary accommodation in 2018/19 – figures were estimated by MHCLG based on previous quarters.}

London appears to be securing temporary accommodation more cost effectively than elsewhere

To assess how cost effectively temporary accommodation is being secured across the country, we compared total per-household expenditure on temporary accommodation with the median private rent in each area.^*

In London, the cost of temporary accommodation is roughly equivalent to the local median private rent, making it relatively efficient by national standards. This is nearly three times as cost-effective as temporary accommodation in Yorkshire and the Humber, relative to local rents. There it costs 2.8 times as much to put a household in temporary accommodation as it does to house them permanently in the private sector. But the fact that best value is achieved when councils pay market rents – for temporary accommodation that may be unsuitable and is used to house people in the most financially precarious situations – highlights how distorted the system has become.

London has faced high levels of homelessness for many years and may, as a result, have developed more tools to contain costs. One London borough told us it had repurposed care homes into temporary accommodation, for example, and was looking at converting disused schools next. ⁴⁹⁵ Institute for Government interview.  London’s relative cost-effectiveness is also likely to be influenced by the high price of rents in the capital. Placing households out of area – as 46% of homeless households who are allocated temporary accommodation by London boroughs are^{**, 496} Ministry of Housing, Communities and Local Government, ‘Statutory homelessness in England: January to March 2025’, GOV.UK, 22 July 2025, www.gov.uk/government/statistics/statutory-homelessness-in-england-january-to-march-2025/statutory-homelessness-in-england-january-to-march-2025  – is often significantly cheaper than London market rent, and therefore cost-effective according to our metric.

While variation in cost-effectiveness among London boroughs is fairly large, it is relatively limited compared to other regions. In London,^*** the ratio between temporary accommodation costs and local private rents spans from 0.6 in Wandsworth to 1.7 in Merton, a gap of 1.1. But elsewhere in the country, the variation is far greater. In the North West, one council is spending up to 25.2 times the local median private rent to house a family in temporary accommodation, while another spends as little as 0.5.

_{* There are doubts over the quality of ONS private rent figures, but they are still the best readily available source. Figures in this section should therefore be interpreted with caution. Spending on temporary accommodation varies year-to-year at a local authority level, therefore findings may differ depending on the financial year of spending data used. See the Methodology for details of the calculation.}

_{** According to MHCLG, “households out of area may include households placed in TA by their local authority as well as those recorded as duty owed but no accommodation secured”; 46% may therefore be an overestimate.}

_{*** Seven of London’s 33 boroughs are missing data.}