Izzy Lepone 30 September 2025

London homelessness spending has soared by over 40%

London homelessness spending has soared by over 40% image
© Ink Drop / Shutterstock.com.

Spending on homelessness in London has increased by 42% over the last year, analysis has confirmed.

According to data from cross-party group London Councils, homelessness costs totalled at £5.5m each day for boroughs in 2024-25, compared to the £4.2m spent daily last year.

The group found that nearly £5m a day is allocated for temporary accommodation costs in London, which constitutes the largest proportion of this year’s homelessness spending.

Expressing concerns about the Fair Funding Review 2.0, London Councils has emphasised that by using 2023-24 spending data to assess temporary accommodation spending, the Government could ‘significantly undercount’ the issues.

The group has also reinforced that the Index of Multiple Deprivation (IMD) should be adjusted to ensure homelessness and housing poverty are accurately represented, as well as calling for adaptations to the children’s formula model to incorporate SEND measures and resolve erroneous judgements about overcrowded housing.

Following the reforms, London Councils has predicted that several more boroughs will need Exceptional Financial Support (EFS) due to facing an estimated £700m shortfall over the next three years.

Cllr Claire Holland, Chair of London Councils, said: ‘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.

‘We want to work with the government to address our concerns with the Fair Funding Review so that we can help restore stability to council finances and prevent more boroughs being plunged into crisis.’

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