A man from London was forced to lose his job after he was given temporary accommodation in Birmingham.
The man, who has not been named, was working two jobs to support his family when he was offered the home 140 miles (225 km) away.
An investigation by the Local Government and Social Care Ombudsman found Merton Council did not take into account the man’s employment status.
The council apologised and said it accepted the ombudsman’s findings.
The man said he told council officers he would lose his job by taking up the temporary accommodation offer in October 2017, but the council said it had no record of this.
The Local Democracy Reporting Service reported that ombudsman Michael King found evidence the man told the council he was finding it hard to keep up his job a month later, but the council did not consider moving him closer to his employment.
‘Listened to concerns’
The man gave up one of his jobs and faced increased travel costs to keep the other.
“Had the council listened to the man’s concerns, it is likely he would not have been placed so far away from his work,” said Mr King.
“I have previously talked about how the pre-conceived ideas of homelessness no longer ring true, and we’ve seen people in work come to us with complaints about their councils’ housing support.
“This is another example of the kind of problems experienced in today’s housing situation.”
The council has been asked to review the way it places people in temporary accommodation.
A spokesperson from the council said: “We have complied with the Ombudsman’s ruling in full and have reviewed our procedures in line with the recommendations made.”
The local Liberal Democrats have called for a review of all residents who have been housed more than 90 minutes outside London in the past two years.
Councillor Paul Kohler said: “We need to go further and investigate why we are housing people so far from their relatives and friends in the first place.
“Moving families to places where they know no-one is hugely stressful and disruptive and Merton should be avoiding doing so whenever possible.”