UK Ministers Weigh Higher Rents to Disperse Asylum Accommodation Beyond Deprived Areas
UK ministers are considering paying above-cap rents to landlords who house asylum seekers in private rental properties, as part of Greater Manchester mayor Andy Burnham's plan to spread asylum accommodation more evenly across the country. The proposal, first reported by the Telegraph, would require the Home Office to raise strict caps on how much it can pay landlords in rent, because officials believe the current caps concentrate asylum accommodation heavily in the most deprived areas, where rents are cheapest (The Guardian).
The policy under discussion addresses a structural tension at the heart of the UK's asylum accommodation system. Dispersal accommodation, defined in the Home Office's Asylum Dispersal Grant funding instruction as housing provided to asylum seekers, has historically been sited where private sector rents are low. That tends to mean deprived communities absorb a disproportionate share. Key considerations for dispersing asylum seekers include the availability of private sector housing for rent, school places, and local health services (The Guardian).
The backdrop is one of significant, if incomplete, transformation. Before the general election, UK hotel use for asylum seekers peaked at 400 sites costing £9 million a day. The number of hotels in use has since fallen from 213 in July 2024 to fewer than 160. The number of asylum seekers staying in hotels has fallen by 35% over the past year and is down 63% from the 2023 peak. The share of asylum seekers in hotels fell to 21% by the end of March 2026 (The Migration Observatory, Oxford). Over the same period, the use of dispersal housing roughly doubled. Overall asylum support costs have fallen by £1 billion since the general election, with hotel closures under the last Conservative administration accounting for £1 billion in savings (The Guardian).
The Chancellor has said in her Spending Review that the government will end the use of hotels to house asylum seekers within this Parliament (Channel 4 News). In November 2025, the government announced an "entirely new asylum model" alongside plans to reduce asylum spending by £1 billion a year by 2028 (Public Accounts Committee). From 2 June 2026, the Home Office has used a statutory power to provide accommodation to destitute or soon-to-be-destitute asylum seekers (GOV.UK).
Burnham's involvement carries a long history. In November 2018, he criticised the mounting chaos of the UK asylum system, noting that demand for asylum accommodation in his region had increased by 58% since April 2014 (The Guardian). His current plan to broaden dispersal nationally is the logical extension of that long-standing grievance: if accommodation is concentrated where rents are lowest, then raising the price the state will pay should, in theory, open up areas that have previously declined to participate or been passed over by providers.
The proposal has drawn immediate political resistance. Joe Robertson, the Conservative MP for the Isle of Wight, criticised the plan, arguing that Burnham needs to choose locations offering the most cost-effective accommodation in the best interest of taxpayers (The Guardian). Karen Bradley, the Conservative chair of parliament's Home Affairs Committee, occupies a central oversight role as the policy develops (The Guardian). Imran Hussain, director of external affairs at the Refugee Council, is among the civil society figures positioning around the debate.
The financial architecture beneath the proposal is layered. The Home Office awards contracts for dispersal accommodation and reception services to private providers, who in turn secure properties from landlords. The Asylum Dispersal Grant funding instruction for 2025-2026 provides financial support to local authorities for eligible expenditure costs of supporting dispersal accommodation through to 31 March 2026 (GOV.UK). Asylum seekers in dispersal accommodation received £48 a week in March 2026, while those in hotels received £9.95 per person (The Guardian).
The core trade-off is straightforward to state and difficult to resolve. Paying higher rents to landlords in less deprived areas would, on the government's own analysis, reduce the geographic concentration of asylum accommodation. It would also increase the per-unit cost of housing each asylum seeker, potentially eroding some of the £1 billion in savings already achieved. Whether those savings can be sustained while widening the geographic footprint of dispersal is the question the Home Office must now answer. The alternative — leaving the cap in place and accepting that asylum accommodation clusters where rents are cheapest — perpetuates a distributional inequality that regional leaders, Burnham chief among them, have spent nearly a decade challenging.
