London Councils, the lobbying organisation for the 33 local authorities, has highlighted figures showing that 1,680 people were registered by local authorities as living in bed and breakfasts, from October to December 2011.

This was a 26 per cent increase on the period from January to March last year, when 1,330 people were recorded by councils as living in bed and breakfast accommodation in the capital.

In a report to the Leaders’ Committee, London Councils warns that an increasing shortage of affordable properties in the private rented sector is forcing councils to place homeless people into bed and breakfast accommodation

Since April last year, reductions in housing benefit (Local Housing Allowance) have meant that people have had to move out of their properties in cases where landlords refused to lower the rent.

The report, published online, warns: “This is leading to a lack of private rented supply in which to place homeless or potential, homeless households (in some boroughs this situation is now acute), which results in an increased number of borough placements in expensive bed and breakfast accommodation. This situation is deteriorating and is expected to continue to deteriorate over the short to medium term.”

It also warns that the situation is likely to further deteriorate when the government’s Universal Credit Cap is introduced from April 2013. This will limit the amount families can claim for all their benefits to £500 a week and the amount that single people can claim in housing benefit to £350 a week.

Figures from the Department for Work and Pensions show that in the London borough of Brent, for example, 1,900 households are set to lose up to £100 a week in benefits and a further 1,400 households will lose more than £100 a week once the housing benefits are fully implemented.