London boroughs are spending £5.5 million per day to provide temporary housing for people at risk of homelessness as record numbers of people seek support.
London Councils say that new data published this week show the capital’s homelessness crisis continues to escalate, with net current expenditure on homelessness in London rising by 42% since last year, compared to a 16% increase across the rest of England.
Boroughs were spending £5.5 million a day on homelessness in 2024-25 – up from £4.2 million a day in 2023-24 – with the body that represents all London boroughs warning that current funding shortfalls to tackle homelessness could get even worse if planned changes to the way central government calculates money councils receive doesn’t address London’s high costs of housing.
Cllr Claire Holland, Chair of London Councils, said: “This is a stark reflection of the scale of the capital’s housing crisis, which continues to worsen.
“After more than a decade of structural underfunding, rising costs and growing demand, it is vital that boroughs receive funding which genuinely reflects the level of need in the capital.”
There are currently 73,000 households in temporary accommodation across London, a number that has risen steadily since 2011 and includes over 8,000 accommodated in hostels or B+Bs according to latest government figures.
When a household becomes homeless their local authority has a legal duty to provide them with accommodation but in the face of steep rises in the cost of living, charities in the sector would like to see more done to prevent homelessness.
Catherine Parsons, Managing Director of Big Issue Changing Lives CIC, said: “There isn’t enough understanding about how to work with landlords to keep people in their homes which is very disruptive for the families affected but also very expensive for the local authorities and the tax payer.
“We should spend the money on increasing the supply of affordable housing and helping people that are already in accommodation to stay there.”
With a forecasted collective funding gap of at least £500 million for council services across the 32 borough this financial year, town halls are raising the alarm that without meaningful reform, more councils may be forced to consider emergency financial measures.
Seven London boroughs currently require Exception Financial Support (EFS) for the 2025-26 financial year, with more at risk of having to sell off assets or borrow money to be able to pay for council services.
Featured Image Credit: RJ Baculo on Unsplash
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