Across England, more families than ever are being squeezed into temporary accommodation – hotels, bed and breakfasts and short-let flats that were never intended to be permanent homes.
Cash-strapped councils are running out of options to deal with the rising number of people housed in temporary lodgings, while some private landlords are pocketing millions of pounds.
The charts below – published as part of our Through the roof series – explore the scale and consequences of the temporary accommodation crisis, and how a system that was supposed to provide a short-term solution has become a long-term struggle.
England stands out for its homelessness problem
A report from the Organisation for Economic Co-operation and Development published last year found that England had the highest rate of homelessness in the developed world in 2023 – with 124 out of every 10,000 households lacking a permanent residence. The vast majority of homeless people were not sleeping on the streets, the report found, but were instead housed in temporary accommodation.
In the year since the OECD published those figures, the problem has deepened. The number of rough sleepers counted in the government’s annual snapshot rose 20% from 2023 to 2024, and the number of households living in temporary accommodation has increased by 19%. As a result, the amount of money spent by councils has soared.
Councils are spending six times more money than they did a decade ago
In total, English councils spent more than £2.1bn on temporary accommodation in 2023-24 (excluding admin costs), a record figure.
They managed to claim just over half of it back from the Department for Work and Pensions, which has to pay councils a portion of housing benefit spending. However, the amount councils can reclaim is capped at 90% of local housing allowance rates – from 2011.
Real-world rent rises, coupled with a general increase in the need for accommodation, means councils now spend almost £1bn out of their own pockets – six times more than they did a decade ago, after taking inflation into account.
There have been particularly large rises in spending on B&B hotels and on expensive “nightly paid” accommodation. Unlike with B&Bs, there are no laws preventing lengthy stays for children in nightly paid units, which are self-contained.
Homelessness costs mean less money for everything else
These rising costs pose a threat to overwhelmed local government finances – a sector already stretched by a crisis in special educational needs support and social care. Some councils are spending as much as half of their core resources housing people in hotels, B&Bs or other temporary accommodation.
Last year there were 21 councils where the equivalent of more than £1 in every £10 of money available for core spending went on temporary accommodation. That was twice as many as in 2022-23.
Crawley council (which spends the equivalent of 40% of its core budget on temporary accommodation) has said its costs pose a critical risk to council finances in future years. Hastings is spending more than half its core budget on temporary accommodation, in part because it refuses to use lower-cost B&Bs, which officials have deemed unsuitable for children.
A lucrative industry
Where is the money going? By combining freedom of information requests with council invoices compiled by the analytics company Oxygen Finance, the Guardian was able to follow the money back to the landlords, hotel chains and other companies that earn substantial amounts from the crisis.
The list of more than 2,000 different companies and individuals includes the charities St Mungo’s and the YMCA and the Travelodge and Premier Inn hotel chains.
Homelessness is projected to worsen
Homelessness is set to worsen despite a ban on no-fault evictions currently going through parliament. Projections for the Guardian by the homelessness charity Shelter show the number of households in temporary accommodation could surge to 182,000 – which would include 205,000 children. Council spending could rise 71% over the same period, the charity found, if trends toward more expensive B&B and nightly paid accommodation continue.
A lack of social housing compared with demand is one of the causes of the problem. Despite the rise in housing associations in recent decades, the total number of social homes in England is lower than it was in 2001. More than 1.3 million families are on waiting lists for social homes in England – with 100-year waits for a family home in some areas. A lack of housing in general means private rents are soaring – pushing those who cannot pay into homelessness.
