Record Temporary Housing Spend
English Councils Spend Record £2.9bn on Temporary Housing Amid Rising Homelessness Crisis
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Key Points
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The spending equates to just over £8 million a day, while expenditure on bed-and-breakfast accommodation alone rose from £711 million to £822 million.
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London has the highest rate of households in temporary accommodation in England, at 21.1 per 1,000 households, compared with 5.5 per 1,000 across England as a whole.
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Shelter policy director Mairi MacRae said councils were being forced to send billions to private companies for “cramped and often grim temporary accommodation” because they lacked enough social homes.
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Crisis chief executive Matt Downie called for housing benefit to be unfrozen so that it reflects the actual cost of private renting, arguing that high rents and a shortage of affordable homes are pushing people toward homelessness.
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The government pledged £30 million in June to reduce the use of emergency accommodation, while Prime Minister Andy Burnham separately announced £340 million in new funding to tackle rough sleeping and pledged to end it.
England's councils spent a record £2.9 billion on temporary housing from April 2025 to March 2026, nearly doubling over five years. The spending equates to just over £8 million a day. A record 135,580 households, including 177,530 children, were living in temporary accommodation, often for months or years.
About two-thirds of the money went to expensive emergency options like bed-and-breakfasts and nightly-paid rooms. Bed-and-breakfast costs alone jumped from £711 million to £822 million. Housing charities say the crisis reflects a severe shortage of affordable homes and are calling for a shift toward permanent solutions.
Why Temporary Housing Costs Keep Climbing
Councils are caught in a squeeze. They must house homeless families but lack affordable homes to place them in. So they turn to expensive private providers for emergency rooms. Rising private rents make the problem worse—the average UK rent hit a record £1,412 a month in the year to August 2026, up 3.9% annually. Shelter policy director Mairi MacRae said councils were forced to send billions to private companies for "cramped and often grim temporary accommodation" because they lacked enough social homes.
London Faces the Worst Homelessness Pressure
London has the highest rate of temporary housing use in England. It houses 21.1 homeless households per 1,000 residents, compared with just 5.5 per 1,000 across all of England. This gap shows how unevenly the housing crisis hits different regions. The capital's expensive private rental market pushes more families into crisis.
Experts Call for Unfreezing Housing Benefits
Housing charities say temporary accommodation is a expensive band-aid. Crisis chief executive Matt Downie called for housing benefit to be unfrozen so it reflects actual private rents. High rents and a shortage of affordable homes are pushing people toward homelessness, he argued. Without permanent affordable housing, councils will keep paying billions for temporary fixes.
Government Pledges Funding but Scale Remains Unclear
The government pledged £30 million in June to reduce emergency accommodation use. Prime Minister Andy Burnham separately announced £340 million to tackle rough sleeping and vowed to end it. Yet these sums are small compared to the £2.9 billion councils now spend yearly. Local authorities warn that temporary housing is eating a growing share of their budgets, leaving less money for schools and other services.
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