Councillors have warned that a record 104,000 households are living in temporary accommodation.
The figure, from the end of March, is a 89% rise over the past decade and the highest figures since records began in 1998.
The Local Government Association (LGA) warned that temporary housing cost councils at least £1.74 billion in 2022/23.
Councillor Darren Rodwell, the housing spokesman at the LGA, said: “Councils are under mounting pressure to find suitable homes for an ever-increasing number of people and are doing the best they can under current circumstances.
“A plethora of issues has meant that council budgets are being squeezed and the chronic shortage of suitable housing across the country means that councils are increasingly having to turn to alternative options for accommodation at a significant cost.
“Councils need to be given the powers and resources to build enough social homes for their residents so they can create a more prosperous place to live, with healthier and happier communities.”
A severe shortage of social housing means councils are being forced to pay to house people in private temporary accommodation, including hotels and B&Bs while they wait for a permanent home.
The LGA warned that dwindling supply is made worse by the rising cost of living and frozen Local Housing Allowance rates which it warned are driving increases in homelessness and reducing councils’ ability to source suitable accommodation.
Mr Rodwell said: “Councils have a proud history of supporting humanitarian efforts and continue to work hard to protect and support refugees and help deliver a wide range of government asylum and resettlement schemes.
“However, combined pressures from these many schemes are growing on councils and there continues to be a crisis across the refugee and asylum system.
“This is being compounded by a housing crisis, the pace and scale of asylum decision making and the rapidly approaching deadline for all remaining Afghan families to move on from hotels by the end of the year.”
The LGA has called on the Government to use its Autumn Statement next month to provide long-term funding certainty for local government to help councils scale up to deliver an ambitious build programme of 100,000 high-quality, climate-friendly social homes a year.
The Department for Levelling Up, Housing and Communities has been contacted for a comment.
