Speaking at a Homes For Britain rally organised by Jonathan Dimbleby, the socialist film-maker compared the current housing crisis to his gritty 1966 film Cathy Come Home - and said it's worse now than it was back then.
"When Cathy Come Home was made, homelessness was a major issue," Loach said. "Husbands were separated from their families because they had no home, there was terrible poverty accommodation, it was a horror story."
And Loach feels the housing situation has a long way to go. "It is much worse now, much worse now," Loach told the audience. "93,000 kids homeless. What a disgrace in this rich country."
"Tens of thousands of families have their lives in chaos and the politicians who are speaking have allowed it to happen."
The drama, voted the best television drama of all time, told the story of Cathy, and how she loses her home, husband and children.
Homes For Britain was organised as a platform for politicians to have their say about how they would deal with the housing crisis during the next term in government following the May General Election.
Housing charity Shelter says that successive governments have failed to provide Britons with the affordable homes they need.
"The latest Census shows that, in England, the proportion of homes owned with a mortgage has dropped by 15% and now stands at 34% of homes. The proportion of private rented homes has rocketed by 69%," a statement on its website reads. "This historic shift reflects the growing trend in young people and families who are unable to find a stable, affordable home."
Loach's 2013 film, The Spirit of '45, showed the birth of the British Welfare State and the birth of the NHS. He panned recent government's treatment of the health service.
"All politicians will say they celebrate the NHS, but to a greater or lesser extent, they’ve all undermined it," he said.
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