Homelessness across England is reaching unprecedented levels, driven by systemic pressures, welfare shortfalls and growing financial strain on local authorities. Crisis’s Homelessness Monitor: England 2025 found that 300,000 individuals and families experienced the most acute forms of homelessness in 2024—an alarming 22% rise since 2022. Rough sleeping is also increasing, with Homeless Link estimating 8,732 people sleeping on the streets in June 2025, up 5% on the previous year. In London, CHAIN recorded 759 people living on the streets, 11% more than in June 2024.
The crisis is most severe in the capital. London Councils report that 56% of all homeless households in England living in temporary accommodation are based in London. Nearly 200,000 Londoners are now living in temporary accommodation arranged by their boroughs—one in every 50 residents. More than 97,000 are children, meaning at least one child in every classroom is technically homeless. As others prepare for Christmas—shopping, travelling and turning up the heating—thousands will spend winter nights cold, wet and hungry on pavements and in doorways, with no official count of how many will not survive the season.
Local authorities, the frontline of the crisis, are struggling to cope. Crisis found that 79% cannot meet their rehousing duty most or all of the time. Homeless Link’s research shows many homelessness services have reduced capacity or closed altogether during a period of rising demand. Short-term drivers of homelessness—including the freeze on Local Housing Allowance (LHA) and people becoming homeless after contact with public institutions—are compounding the problem. Particularly sharp increases have come from people being asked to leave Home Office accommodation (up 37%) and from discharges from prisons and hospitals (up 22%).
These pressures show why funding alone cannot solve homelessness if wider causes are ignored. Indexing LHA so it covers the cheapest 30% of local rents is identified as one of the most effective preventive steps the Government could take. Without tackling fundamental drivers, funding will continue to act as crisis management rather than prevention.
The forthcoming cross-government homelessness strategy is therefore a crucial opportunity. It must outline how homelessness will be reduced, prioritising prevention and ensuring access to stable housing with appropriate support. Crucially, homelessness funding must be aligned with policy decisions in welfare, the Home Office and the NHS, all of which directly influence the scale of demand on local authorities.
Local authorities urgently need help with temporary accommodation costs. They spent £2.8 billion on temporary accommodation last year alone, often drawing money away from homelessness prevention. While shifting temporary accommodation funding into the Revenue Support Grant is welcome, the Government still does not fully subsidise housing benefit for temporary accommodation, leaving councils with escalating bills.
The freeze on LHA leaves families with nowhere affordable to rent; fewer than three in every hundred homes are affordable to those relying on it. Discharges from prisons and hospitals without housing solutions remain unresolved, despite repeated warnings. Meanwhile, the failure to implement the Supported Housing (Regulatory Oversight) Act allows rogue providers to exploit exempt housing benefit rules, leaving vulnerable people in poor-quality or unsafe accommodation.
Although the Government has announced significant funding—£1 billion in 2025/26 for rough sleeping and temporary accommodation, and a new £2.4 billion Homelessness, Rough Sleeping and Domestic Abuse Grant for 2026/27 to 2028/29—homelessness is still rising. To be effective, the new grant must be ringfenced, with outcomes-based scrutiny ensuring local authorities focus on prevention, face-to-face assessments and housing-led approaches that prioritise getting people into safe, permanent homes.
There are also concerns that the planned £2.4 billion grant could amount to a real-terms reduction. If 2025/26 funding levels had continued, councils would have received around £3 billion over the next three years. Temporary accommodation costs have soared to £2.3 billion a year, with spending on costly nightly accommodation rising from 6% to 30% of the total bill in a decade. Although separating temporary accommodation funding from homelessness support is a positive step, outdated housing benefit subsidy rates mean councils may still face severe financial pressure.
Supported housing funding, weakened since the removal of ringfencing in 2009, requires urgent reform. Variations in local commissioning have pushed many providers to rely on exempt housing benefit to fund both housing and support, creating opportunities for exploitation. Implementing the Supported Housing (Regulatory Oversight) Act is essential to curb rogue practices and ensure vulnerable people live in safe, properly regulated accommodation.
Ultimately, homelessness in England is rising faster than the measures designed to prevent it. London now accounts for more than half of all homelessness cases, temporary accommodation costs are spiralling and local authority budgets are shrinking. As temperatures fall, thousands remain without the security of a home. A coherent cross-government strategy—supported by adequate, targeted and evidence-based funding—is urgently required to reverse this trend and protect those most at risk.
Homelessness in England: Rising Pressures and the Need for a Cross-Government Response
