Revealed: landlords and hotels are 'cashing in' on homelessness crisis

Investigation finds local councils paying huge bills for temporary housing

- Kiran Stacey Michael Goodier Olivia Lee

Private landlords and hotel owners are charging councils far in excess of market rent to house people who would otherwise end up on the street, an investigation has found, laying bare the depth of England's hidden homelessness crisis.

Local authorities in England are paying 60% more for rooms in places such as bed and breakfasts and hostels than it would cost to rent similar-sized accommodation on the private market. Half of them are spending double the local going rate.

More than 100,000 individuals and families live in temporary accommodation in England. The UK has the worst homelessness problem in the developed world when this is taken into account.

Experts said that the country had created a £2bn industry of under-regulated providers of stopgap housing, some of which are supplying dirty, rat-infested and dangerous accommodation, according to those who live there.

"Temporary accommodation is the shame of our society," said Mairi MacRae, director of campaigns and policy at Shelter. "Families are stuck for months, even years, in often overcrowded, appalling conditions, and shunted from place to place with little to no notice.

"It is nothing short of outrageous that private providers have been cashing in on this crisis, but without enough homes for social rent, councils have little choice but to pay these eye-watering sums so families don't end up on the streets."

Local authorities are meant to use temporary accommodation to house people as a stopgap while they work out firstly whether they qualify for social housing and, if so, where they can live on a more permanent basis.

Some councils use their own housing stock, but most are forced to rely on bedsits, private flats, and rooms in bed and breakfasts and hotels.