Will and Kate face the prospect of being new parents without a home when their baby is born next summer.
Plans to move into a lavish new apartment in Kensington Palace have been delayed as renovations are unlikely to be finished by the time of the birth.
"At the moment there is just no way their new home will be inhabitable by the time the baby is born," a source told the MailOnline.
Builders have apparently found asbestos in the apartment, which has delayed the revamp.
Meanwhile, the couple's place in Angelsey is tied to Prince William's RAF job and he is due to end his time in north Wales in nine months time.
The royal couple do have access to a two-bedroom cottage in the Kensington Palace grounds, but it is unlikely to be big enough for the new family.
They're not the only ones with housing issues. The recession plus the government's new restrictions on housing benefit has pushed up homelessness in London by 43% over the last year, according to new figures.
Duchess Kate is set to stay in London during the pregnancy, after being admitted to King Edward VII hospital in Marylebone on Monday (03.12.12) suffering from acute morning sickness. She will now stay under medical care for a short "period of rest".