Benefit reforms and a shortage in housing have led to rocketing numbers of rough sleepers and people turning to emergency accommodation, research has found.
Temporary accommodation is being used to shelter 10% more people over the last financial year with bed and breakfast placements going up by 14%, an independent study published by Crisis and the Joseph Rowntree Foundation (JRF) said.
It found that rough sleeping rose last year by 6% across England and 13% in London, with the hike made up from both UK and overseas nationals.
Leslie Morphy, chief executive of Crisis, said: "We keep hearing that the economy is on the mend. Yet as we watch our GDP figures slowly rise, cuts to housing benefit and woefully inadequate house building will keep pushing up homelessness. Shamefully, it is the poorest and most vulnerable that are bearing the brunt.
"We need the Government to address the chronic lack of affordable housing, take real steps to improve the private rented sector and to urgently consider the impact its cuts to housing benefit are having, particularly in the capital."
Researchers said a sh ortfall in the number of new homes being built was a "major factor" in the hike but warned that welfare cuts and reforms were also "critical" to overall levels of homelessness.
In particular, caps in housing benefit are making it more difficult for people to find somewhere to rent from a private landlord, particularly in London. The Homelessness Monitor report showed claimants in Westminster and Kensington and Chelsea had gone down by a quarter since March 2011.
It also warned that reforms introduced earlier this year, including the so-called bedroom tax, are already having an impact, most notably in the Midlands and the North.
The overall benefit cap for out-of work households is particularly hitting larger families in London, it added.
Julia Unwin, chief executive of JRF, said: "Homelessness is the tragic consequence of failures in our housing system and carries enormous cost for both the people facing destitution and society as a whole. To avoid these figures going in the wrong direction, we need to address the underlying causes of homelessness urgently.
"That means building the affordable homes this country desperately needs and providing a proper safety net for when people are unfortunate enough to fall on hard times."
Housing Minister Kris Hopkins said: "I am determined to ensure that we don't return to a time when homelessness was more than double what it is today.
"This Government has maintained strong measures to protect families against the threat of homelessness and acted decisively to introduce a more accurate assessment of previously-hidden rough sleeping.
"We have supported the national roll out of No Second Night Out to prevent persistent rough sleeping, and given councils greater freedoms to house people in private rented homes.
"On top of this we have provided nearly £1 billion for councils to reduce homelessness and support those affected, while delivering 170,000 more affordable homes since 2010. All this has meant statutory homelessness remains at a lower level than it was in 27 of the last 30 years."