Lambeth council spent more than £100 million on housing homeless people in bed and breakfasts last year, new figures show.
Housing and homelessness charity Shelter said families are being pushed into homelessness and living in "awful" temporary accommodation across the country due to unaffordable rent and lack of social homes.
Department for Levelling Up, Housing and Communities figures shows Lambeth council spent a total of £55.8 million on temporary homeless housing in the year to March, up from £49.1 million the year before.
All of last year's spending went towards housing homeless people in bed and breakfasts.
Last year's spending is also higher than the amount spent five years ago when £33.6 million was put towards temporary homeless accommodation in the area – equating to a real-terms increase of 48%.
Across England, an estimated £1.6 billion was used by local authorities towards short-term accommodation for people facing homelessness in 2021-22 – up 5% from the previous year and a 62% real-terms increase from five years ago.
Of last years total expenditure, £407 million went towards bed and breakfasts and hostels. Spending on bed and breakfasts alone has increased 7% in real terms since 2016-17.
Polly Neate, chief executive of Shelter, said: “Homelessness is bad for the economy and it’s even worse for the people whose lives it destroys.
“It defies all logic to shell out over £1.6 billion on grim B&Bs and grotty flats, instead of helping people to keep hold of their home in the first place."
Ms Neate added housing benefit – which assists people who are unemployed, low-income, or on other benefits to pay rent – has been frozen since 2020 "despite private rents rocketing".
She added: "This gaping hole in our country’s safety net is throwing families needlessly into homelessness and trapping them in awful temporary accommodation because they can’t afford private rentals and there are barely any social homes.
"Allowing homelessness to rise unchecked during the cost-of-living crisis, will only cost more in the long run.”
She said housing benefit must be unfrozen so people can better pay rent and added the Government must build "truly affordable" social homes to end homelessness.
A Department for Levelling Up, Housing and Communities spokesperson said it is providing councils with £316 million this year to prevent homelessness.
They added: “Temporary accommodation is a last resort, but a vital lifeline for those at risk of sleeping rough.
“We know people are concerned about rising costs, which is why have announced the Energy Price Guarantee, to support household with their energy bills over the winter, and a further £37 billion of support for those struggling with the cost of living.”