Homeless people are too often given "ineffectual and meaningless" advice by councils which treat them badly, according to MPs.
A report by the Communities and Local Government Select Committee blames an increase in homelessness on a shortage of social housing and the prohibitive cost of renting in the private sector.
But it also takes aim at local authorities for failing to do enough to help the homeless.
The report states homelessness is "undoubtedly increasing" and suggests the scale of the problem requires the Government to come up with a new plan of action.
It highlights varying levels of support for the homeless across the country as it calls for ministers to monitor councils and identify those failing to help people as they should.
It also calls on the Government to consider introducing a legal duty for councils to have to provide "meaningful support" to single homeless people, rather than, for example, just handing them a list of local letting agents.
Clive Betts, the chairman of the committee, said: "No-one should be homeless in Britain today, but the reality is that more and more people find themselves on the streets, in night shelters or going from sofa to sofa to keep a roof over their heads.
"They are often driven there by the availability and cost of housing and have been failed by front line support services along the way.
"The scale of homelessness is now such that a renewed Government strategy is a must.
"It needs to not only help those who are homeless but also prevent those vulnerable families and individuals who are at risk of becoming homeless from joining them."
Mr Betts also stressed the "big part" local authorities need to play to solve the problem.
"The committee recognises they 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," he said.
"We want the Government to monitor local authorities and help them achieve best practice."
The report suggests homelessness services provided by councils should be "sympathetic and sensitive".
It calls on the Government to help deliver more social housing for affordable rent and states homeless families should only be placed in accommodation outside their local authority area as a "last resort".
It also highlights the plight of the "hidden homeless" - those people who are in temporary accommodation or are sleeping on a friend's sofa - and calls for a tailored action plan to be drawn up to help homeless people suffering from mental health issues.
Other findings of the report include: Government welfare reforms have increased pressure on levels of homelessness, additional resources should be allocated to expand help for victims of domestic abuse, and housing benefit recipients should be given the option of their money being paid directly to their landlord to avoid getting into arrears.
Committee member Bob Blackman is bringing forward a Private Member's Bill, backed by other members of the committee, to address some of the issues highlighted in the report.
Nick Forbes, senior vice chairman at the Local Government Association which represents dozens of councils across England and Wales, said: "Homelessness is rising as more people struggle to cope with rents spiralling above their incomes.
"Faced with increasing demand, reducing budgets, falling social housing and wide-ranging welfare reforms, it is clear that councils cannot tackle this challenge alone.
"Local government can succeed in reducing homelessness if given the funding and powers to bring together local housing, health, justice, and employment partners, to address the gaps between household incomes and spiralling rents, and to resume their historic role as a major builder of affordable homes."
Mr Forbes said extending legal duties would "need to be accompanied by sufficient powers and funding".
Youth homelessness charity Centrepoint said successive governments have grossly under-estimated the scale of the problem.
Policy director Balbir Chatrik said: "Thousands of young people will continue facing dangerous situations at home and on the streets unless the Government heeds this report and takes more responsibility for all those seeking support - not just those it is legally obliged to help.
"Successive governments have been content to measure homelessness against their own narrow definition, grossly under-estimating the scale of the problem and failing to allocate sufficient resources to councils."
St Mungo's said it particularly supports calls to introduce a new legal duty on local authorities to provide emergency accommodation for homeless people.
The charity's chief executive, Howard Sinclair, said: "The committee's report comes at a crucial moment for homelessness policy. Rough sleeping is rising dramatically and we agree with the committee that there is an urgent need for a new cross-government strategy to stop the scandal of people being left stuck on our streets.
"It is fantastic the committee has recognised the time is right for new homelessness legislation in England to fill in the gaps in the law that leave too many people not considered 'priority need' with little, if any, meaningful help."
A Government spokesman said: "Statutory homelessness remains less than half the 2003-04 peak; however, one person without a home is one too many.
"The Government is investing more than £500 million to prevent and tackle homelessness and continues to spend around £90 billion a year on working-age benefits to help the most vulnerable."
He added: "The report recognises the causes of homelessness are varied and complex, so across Government we are considering how to improve services, including around mental health and addiction support."