A report by the Communities and Local Government Select Committee found that rough sleeping in England spiked to 3,569 between 2014 and autumn 2015. One quarter of those were sleeping on the streets of the capital.
Although the figures are damning, the committee said they do not include those who had not come forward for help and been registered as a result. The report termed these the "hidden homeless."
The investigation found that homelessness is on the rise due in part to the need for renters to pay landlords from their state benefits.
It was found that young people aged 18-21 are at particular risk of being made homeless.
The MPs found "the impact of the welfare reforms of recent years has increased pressure on levels of homelessness."
It also said the welfare cap of £20,000-£23,000 (US$26,000-$30,000) on families in London could well worsen the issue in the years ahead.
"The scale of homelessness is now such that a renewed Government strategy is a must," Labour MP Clive Betts, who chairs the committee, said.
Struggling local authorities "face a significant task with funding pressures and legal obligations, but vulnerable people are too often badly treated, being made to feel like they are at fault, and offered ineffectual and meaningless advice."
Liberal Democrat leader Tim Farron, whose party was in coalition government with the Tories when many austerity measures were forced through, was especially critical of the situation.
"Soaring homelessness is an utter disgrace in 21st-century Britain. It's a symptom of the housing crisis that the government is failing to tackle," he told the Independent on Thursday.
"As well as inadequate social housing, we now have an expanding private rented sector which is too often unstable, unsafe and unaffordable, and renters can end up homeless through no fault of their own," he said.
Comment: Extreme poverty has been increasing for years in the UK, yet nothing changes because the ruling elites have no capacity to care about the most vulnerable: