Local councils say in some cases they are running out of bed and breakfast accommodation.

The demand is also putting a strain on budgets.

The government is introducing new laws to help tackle the problem and councils say finding a solution is now a top priority.

Over the past 10 years, we've had a budget for B&B of �15,000 a year. This year we've had to overspend by about 10 times that amount

Andrew Fiske, South Hams District Council

The number of homeless families is rising so fast, North Devon District Council says it is facing a "real crisis" and has completely run out of accommodation.

The council is now appealing to landlords to come forward to offer help.

Other councils also say the system is under strain and say they are "overwhelmed" by the problem.

Many people in emergency accommodation also say they are under pressure.

Debbie Irwin and her three children recently lost their rented home in Barnstaple in north Devon and now sleep in just one room in emergency accommodation.

She said: "It's very stressful. But not just for me, it's stressful for the children because we're all in one room together.

"Trying to settle them down to sleep is difficult. They're all different ages. It's very hard."

Private landlords are selling up

Andrew Fiske of South Hams District Council said: "Over the past 10 years, we've had a budget for B&B of �15,000 a year, which we've underspent every year.

"This year we've had to overspend by about 10 times that amount - which gives you some idea of the level of crisis we face."

The spiralling cost of house prices is the main cause for the crisis, along with a drop in the number of rental properties, as landlords sell up to make money.

There is also a lack of social housing, which has resulted in homelessness charities calling for the right to buy council houses to be suspended because it was making shortages worse.

The government has brought in a Homelessness Act and set up a unit to help tackle the problem.

At this year's Labour Party conference, Deputy Prime Minister John Prescott said he planned to announce a "step change" in housing to parliament in the New Year.