Home Office pays to rent out 16,000 properties to asylum seekers despite housing shortage for Brits as officials fear move could create 'ghettos'

• Home Office has 16,000 rental homes to use as housing for asylum seekers 

A stock of 16,000 rental properties for asylum seekers has been put together by the Home Office – even though there is an acute shortage of homes for young Britons and families.

Landlords have reportedly been offered five-years of guaranteed full rental payments by contractors working for the Home Office who will manage the properties as the government rushes to move asylum seekers from hotels.

But officials have warned that the move could create ‘ghettos’ as these properties have been concentrated in areas where properties are cheaper in Hull, Bradford and Teesside.

The homes come from the same pool as those in the private and social rented sector, and are being used to house more than 58,000 asylum seekers in Great Britain.

This is more than double of those in rented ‘dispersed accommodation’ ten years ago.

File photo of the scene outside the Comfort Inn hotel on Belgrave Road in Pimlico, central London, where the Home Office asked a group of refugees to be accommodated four to a room in June 2023

A group of migrants are brought in to Dungeness, Kent on an RNLI lifeboat in June last year

The Home Office is using more rented accommodation so that Rishi Sunak’s target of reducing the number of hotels used for asylum seekers – costing as much as £8million each day – can be met, insiders told The Telegraph.

Approximately 50,000 asylum seekers were housed in 400 taxpayer funded hotels, up until the end of last year. But 50 were due to close by the end of January, and another 50 should be shut by spring this year.

Housing asylum seekers in dispersed accommodation can reportedly cost as little as £30 every day, five times less than the £150 to put them up in hotels.

But families and young adults could face losing out on cheaper rented housing, experts advising the Home Office have advised.

A Home Office insider told The Telegraph that the department prefers dispersal accommodation as it is less expensive and ‘more discreet than hotels’.

They said that contractors were using properties in ‘pretty normal streets’, adding that someone could buy a £300,000 house and then find that next door is ‘full of asylum seekers’.

The insider said that MPs were starting to hear reports of problems because of this.

They said the properties have been ‘heavily clustered’ in areas with cheap housing, Hull, Bradford and Teesside.

‘It is potentially damaging to these places because it creates ghettos which are terrible for integration,’ they told The Telegraph.

It is understood by the paper that up to 30,000 homes may be needed to end the use of asylum hotels without significantly cutting the 100,000 long list of asylum cases awaiting a decision.

Around 1.21million people were on council housing waiting lists at the end of 2021-22, a slight increase from 1.19 million in 2020-21.

The Home Office is using more rented accommodation so that Rishi Sunak’s target of reducing the number of hotels used for asylum seekers (file photo)

Serco, Clearsprings and Mears, the contractors behind the asylum accommodation scheme, have been paid around £4billion over ten years for it.

Benefits to landlords espoused by Serco including five-year leases with ‘rent paid in full, on time, every month, with no arrears’, and full repairs and maintenance cover, apart from structural defects with the property.

A Home Office spokesperson said: ‘We have always been upfront about the unprecedented pressure being put on our asylum system, brought about by a significant increase in dangerous and illegal journeys into the country over recent years.

‘We continue to work across government and with local authorities to identify a range of accommodation options to reduce the unacceptable use of hotels which cost £8 million a day.

‘The government remains committed to engaging with local authorities and key stakeholders as part of this process.’

Read more