Councils are being forced to “leave homeless people on the streets” because of a chronic lack of affordable housing in their areas, Crisis has said.
The charity said its research showed more than a third of those asking their local authority for help saw their situation remain the same or worsen.
In some cases, the only help people were given was a list of potential private landlords for them to contact.
Ministers said support to address rough sleeping was going up by £69m to £437m.
The Local Government Association said their 300 members in England and Wales were doing all they could to help but faced “unprecedented” funding pressures.
In compiling their report, Crisis surveyed 984 people who had been seeking homelessness assistance for two years and conducted face-to-face interviews with 89 others, as well as six local authorities.
It found that legislation introduced in 2018 to prevent people from becoming homeless in the first place had “significantly expanded” access to assistance, particularly for single people.
While the Homelessness Reduction Act – which requires councils to take reasonable steps to help secure accommodation – had made a difference, the report concluded its impact was “constrained by a chronic lack of housing and cuts to housing benefit”.
The report found that 38% of those who approached their local authority for help saw their housing situation either stay the same or worsen.
These included people experiencing the worst forms of homelessness, such as rough sleeping and those having to spend the night in cars and on public transport.
Many respondents said the only support councils were able to offer them was information on how to rent privately while others were placed into temporary accommodation such as B&Bs.
In some cases, the only help people were given was a list of potential private landlords for them to contact, only for them to discover their housing benefit would not cover the rent.
Over half of the respondents renting privately said increasing financial pressures and insecure tenancies had contributed to becoming homeless.
Crisis said the report’s findings were “deeply distressing” and it was calling on the government to invest in housing benefit so that it covers the cheapest third of rents and also to commit to building 90,000 social homes each year for the next 15 years.
“Across England, councils are being forced to leave the people they are trying to help on the streets or drifting from sofa to sofa – all because they cannot find somewhere safe and affordable for them to live,” said its chief executive Jon Sparkes.
“The Homelessness Reduction Act can be at the heart of ending homelessness for good, as this report shows, but this is only possible if councils are properly resourced and have the tools they need to help people leave homelessness behind for good.”
The charity wants a new legal duty on all relevant authorities, including the Ministry of Justice, Department for Work and Pensions, Department of Health and Social Care, Home Office and Department for Education, to prevent homelessness.
The Local Government Association said its members were “doing what they can” but their homelessness services were facing a “funding gap” of £400m by 2025.
“Homelessness services are under extreme pressure as a result of rising demand driven by a severe shortage of social housing, David Renard, the body’s housing spokesman, said.
“Councils want to work with government to be able to prevent homelessness before it happens, but as a result of unprecedented funding pressures, they are becoming increasingly limited in what they can do.”
The Department for Housing, Communities and Local Government said the number of families with children living in B&Bs and other temporary accommodation for more than six weeks was nearly 40% lower than in September 2017.
It said £2bn was being made available to housing associations to deliver more affordable homes while tenants would benefit from the end to the freeze on housing benefit and a £40m package of support to help those facing “affordability challenges” in the private rented sector.
“Everyone should have somewhere safe to live, and to support those most in need we have removed the borrowing cap, freeing up councils to double housing delivery to around 10,000 new social homes a year by 2021/22,” a spokesman said.
“We’ve also made £9bn available through the Affordable Homes Programme to March 2022 to deliver approximately 250,000 new affordable homes of a wide range of tenures, helping more families find a place to call home.”