Criminals should be forced to save part of their prison pay to fund accommodation when they are released, the Tories said as part of a new anti-homelessness strategy.
Shadow housing minister Grant Shapps said the cash would be paid in instalments in a bid to end the "revolving door" that saw many reoffend because jail provided a roof over their heads.
He set out his proposals as new figures showed almost 63,000 families in England were homeless and a charity warned of a potential surge of cases next year as the credit crunch bites.
Other pledges included ensuring troops returning from the frontline were not put at the bottom of waiting lists for housing and reforming benefits to make sure people were better off by getting a job.
Rough sleeping statistics would also be made more accurate, Mr Shapps said.
The threat of homelessness has been thrust back into the limelight because of the recession, with one survey, commissioned by the charity Crisis, this week finding nearly a third predicting they would lose their home within three months of losing their main form of income.
Mr Shapps said: "Research indicates that a third of people reckon that they are no more than three pay cheques away from losing their home. This alarming research indicates why it's vital that homelessness is tackled right across government.
"That's why I'm launching our Blueprint for Tackling Homelessness this Christmas Eve.
"Our blueprint sets out how a future Conservative government would work across Whitehall to help hard pressed families stay in their homes during 2009 and beyond."
Under his proposal, most pay for prison work would go into a fund for victims, some kept for purchases behind bars and the rest put in a "trust", with the money would partly be used to secure accommodation - probably in the private rented sector.
