By Jason Farrell, Senior Political Correspondent
A Sky News Investigation has found families are being forced to live in unsuitable temporary accommodation for up to seven years.
Government figures show that 80,000 children are among the increasing numbers of those living in limbo because councils cannot find them proper homes.
Some are forced to live in hostels or B&Bs where they are only supposed to remain for up to six weeks.
The number of families with children overstaying in B&Bs has quadrupled since 2010.
A separate study by the charity Shelter, seen exclusively by Sky News, reveals 41% of families in temporary homes in London are kept there for more than two years.
Roger Harding from Shelter told Sky News: "We were really surprised by the number of families having to live in temporary accommodation for so long.
"That's 4,000 families living in temporary accommodation for over two years and that's them living in a place where their life has been put on hold.
"They don't have the foundation of a stable home to get back on their feet and to properly look for jobs and get their kids into permanent schools.
"It's just really tough for those families."
Even though they are often more cramped, it costs taxpayers more to house families in emergency or temporary accommodation than in normal council homes.
Mother Derya Dosdogru was given a one bedroom flat in North London as emergency accommodation when she became pregnant.
The bedroom is two metres by two metres and has no windows.
Enfield Council initially said she could move somewhere more appropriate within six months.
But seven years later she and her son still shared the box-like bedroom surrounded by unpacked belongings.
She described it as "like a cell" and like being "in prison" without daylight.
Ms Dosdogru and her son were recently moved out after being assisted by local charity Raising My Voice Foundation.
During those seven years her flat cost the council between £200 and £300 a week.
Classed as temporary or emergency accommodation, rent can be up to three times that of a two bed council property - a bill footed by taxpayers.
Temporary or emergency homes are supposed to be a short term fix for homeless families.
But the number of those in Derya's situation has risen 20% in three years to over 58,000.
When it comes to those in B&Bs, it has doubled from 2,050 families in the first quarter of 2010 to 4,370 in the first quarter of this year.
Henry Gregg from the National Housing Association said: "The increasing number of people languishing in bed and breakfast, hostels and private rented accommodation, often with shared bathrooms and toilets, which is completely unsuitable for families, shows there is a real problem.
"We just don't build enough homes."
But Housing Minister Brandon Lewis told Sky News: "Councils have a responsibility to house families in settled accommodation as quickly as possible.
"We have given them the tools to do this, including strengthening their powers to provide quality privately rented accommodation and providing more than £1bn to tackle homelessness and to support people affected by welfare reform.
"The number of households in temporary accommodation is well below the peak reached under the previous administration, which hit 101,000 in 2004.
"Households now spend on average eight months less in temporary accommodation than at the start of 2010."
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