HM Inspectorate of Probation (HMIP) found that 16 per cent of men and 19 per cent of women were released into homelessness in 2018-19, making them almost twice as likely to reoffend.
It warned of a potential danger to public safety from the 3,700 high-risk prisoners who were freed without stable accommodation, including those convicted of violent and sexual offences.
Joseph McCann, who raped and attacked 11 victims on a rampage shortly after his release last year, was among the inmates who could not be found a place in a probation hostel.
The premises allow convicts to be monitored, put through rehabilitation programmes and given support for mental health, drug and alcohol issues, but HMIP said they did not have enough capacity following government cuts.
The report said there was no statutory duty on probation services to secure housing for the released prisoners they supervise.
And while councils have a duty to prevent homelessness, they are not obliged to house released prisoners unless they are “particularly vulnerable”.
More people are now being released from prison homeless than are arriving in custody in England and Wales.
One man told the watchdog that he was repeatedly recalled to prison for seven years, adding: “I kept reoffending to get put back inside as I couldn’t get accommodation.”
Another added: “[I am homeless] every time I have been out of jail, which is at least 15 times. I come out for about two months and if I ain’t got nowhere then I just recall myself.”
A freed prisoner told inspectors he heard of many people who offend after release “because they don’t know how to get help”.
“People come out of jail and commit crime to go back to jail ‘cause they feel safer in jail,” he said.
Several offenders described a sense of desperation, with one saying: “It’s easier inside than outside … I was begging them not to put me back out on the street, but they said if I didn’t leave the cell I would be forcefully removed.”
The report warned of other cases where people had been sent back to live with their victims, or abusers, because of a lack of alternative accommodation and poor safety checks.
In one example, a woman was released back into her abusive partner’s home despite expressing worries about her own safety. She told inspectors: “I didn’t have any other choice”.
Ministry of Justice figures show 11,435 people were released from prison into homelessness in 2018-2019, and 4,742 homeless people started community sentences in the same period.
The report tracked 116 people a year after release to find that 16 per cent were still homeless and 15 per cent were in unsettled accommodation.
Almost two-thirds of the offenders released without settled accommodation reoffended within the year, compared to 44 per cent who had a home.
Justin Russell, HM chief inspector of probation, said: “Many individuals are homeless when they enter prison and even more are when they leave. Individuals need a safe place to call home — it gives them a solid foundation on which to build crime-free lives.
“It is difficult for probation services to protect the public and support rehabilitation if individuals are not in stable accommodation.
“A stable address helps individuals to resettle back into the community: to find work, open a bank account, claim benefits and access local services.”
Before 2009, probation services commissioned accommodation and services that supported released prisoners until they could manage their own tenancies.
Funding is now given to local authorities but is not ring-fenced, and funding previously spent on those services dropped by more than half in the next five years.
Mr Russell hit out at the lack of a cross-government approach for the accommodation of offenders, calling on different branches to “work together” to support rehabilitation.
“The coronavirus lockdown has further highlighted the urgent need to ensure housing for this often vulnerable group,” he added.
The Prison Reform Trust warned that progress made on rehabilitation inside jail was being lost after release because “basic support” was ignored.
Director Peter Dawson added: “Not having a safe, stable place to live not only creates more victims, but can put life at risk.
“This report lays bare a problem that has been common knowledge for several years. The absence of a joined up strategy in central government to tackle it is inexcusable
“If the government is serious about both rehabilitation and public protection, it must take this opportunity to invest in a coherent plan. Spending billions on new prisons, but peanuts on accommodation for the people they release, is obviously futile.”
Frances Crook, Chief Executive of the Howard League for Penal Reform, said: “Reducing the prison population, funding local government properly and delivering an effective probation service with strong links to housing and women’s centres are key measures that would cut crime and make everyone safer.”
The Ministry of Justice said probation services have a duty to identify and refer people at risk of homelessness to councils, and that the process was being reviewed.
A spokesperson added: “Having a safe and secure place to live is a crucial factor in cutting reoffending, and the probation service works closely with councils to fulfil its duty to help prison leavers into stable accommodation.
“Since this review, we have also introduced new teams dedicated to finding housing, are increasing spaces in approved premises, and our £6.4m pilot — part of the government’s Rough Sleeping Strategy — has helped hundreds of offenders stay off the streets. We are also reviewing our referral process to help prevent homelessness.”