Britain has an urgent need for more social housing to tackle the plight of 100,000 households in temporary accommodation, a committee of MPs says.
A homeless woman in bed and breakfast accommodation
The MPs, who examine the Office of the Deputy Prime Minister, said extending the right-to-buy council house scheme would further limit housing options.
They said the number of people housed in B&Bs or sleeping rough was beginning to rise again after recent falls.
The ODPM welcomed the report, saying cutting this figure was a top priority.
The cross-party ODPM committee had heard temporary accommodation was "silting up".
More guidance for local authorities was needed to help them implement homelessness strategies, as required under the 2002 Homelessness Act.
Committee chairman Labour's Andrew Bennett said: "We must credit the government for the work it has done to get people off the streets and children out of bed and breakfast accommodation.
"This shows what can be done when real effort is put into solving problems.
"Nevertheless, we are deeply worried by the current situation, where over 100,000 households are homeless and people are stuck in temporary accommodation."
A spokesman for the Office of the Deputy Prime Minister said: "We agree that reducing the number of households in temporary accommodation must be a top priority.
"That is why we announced a new target to halve the number of homeless households in temporary accommodation by 2010 as part of our five year plan, Homes for All."
The spokesman said the government was increasing investment to prevent homelessness from £60m in 2005/6 to £74m in 2007/8.
The supply of social rented housing would be boosted by 50% by 2008 with 75,000 provided over the next three years, he added.