Councils in England spent a record £2.8 billion on temporary accommodation for homeless households last year — a 25% rise on the previous year, according to new figures.

The sharp increase reflects the worsening housing crisis, with more families forced into hotels, B&Bs, and short-term lets due to a shortage of affordable housing. Local authorities warn the soaring costs are unsustainable, stretching budgets already under pressure from social care and other frontline services.

Housing campaigners argue that the rise highlights systemic failings in supply, particularly the lack of genuinely affordable homes. Landlord groups also warn that tighter regulation, higher taxes, and the phasing out of Section 21 “no-fault” evictions may shrink the private rented sector further — putting even more strain on councils struggling to house vulnerable households.

The government says it is committed to reducing reliance on temporary accommodation, pointing to its targets to build 1.5 million homes by the end of the Parliament. But local leaders say urgent support is needed now to prevent further overspending and worsening homelessness.

Landlord & Investor Angle

• Partnership opportunities: Councils may increasingly seek private landlords willing to lease properties directly for use as temporary or long-term accommodation.

• Guaranteed rent appeal: Local authority leasing schemes can offer landlords stable, guaranteed income in exchange for medium-term commitments.

• Policy uncertainty: Ongoing tax changes and the Renters’ Rights Bill may deter some landlords from engaging — but others may view council partnerships as a hedge against market volatility.

• Impact on rents: With demand for rental homes outstripping supply, private landlords remain central to easing the crisis. Councils’ rising spend highlights just how dependent the system is on the PRS.