Why the UK Might Pay Landlords More to House Asylum Seekers

The UK government is thinking about paying landlords more than it currently allows to house asylum seekers in private rental homes. The idea comes from Andy Burnham, the mayor of Greater Manchester, who wants to spread asylum housing more evenly across the country. Right now, the government has strict limits on how much rent it will pay. Officials say those limits push most asylum housing into the poorest areas, where rent is cheapest (The Guardian).

Here is the problem this tries to fix. When the government houses people seeking asylum (people who have fled their home country and are asking for protection in the UK), it uses something called "dispersal accommodation" — regular rental homes arranged through private companies. Because the government limits how much it will pay in rent, providers tend to find homes in the cheapest areas. That means poorer communities end up with a lot more asylum housing than wealthier ones. The government also looks at whether an area has enough school places and health services before placing people there (The Guardian).

There has been a big shift recently. Before the last general election, the UK was housing asylum seekers in 400 hotels, costing £9 million a day. Since then, hotel use has dropped from 213 sites in July 2024 to fewer than 160. The number of asylum seekers in hotels has fallen by 35% in the past year and is down 63% from the peak in 2023. By the end of March 2026, only 21% of asylum seekers were in hotels (The Migration Observatory, Oxford). Over the same period, the use of rental housing for asylum seekers roughly doubled. Overall, the government has saved £1 billion on asylum support since the general election, with hotel closures under the last Conservative government accounting for those savings (The Guardian).

The government has promised to stop using hotels for asylum seekers entirely before the current Parliament ends (Channel 4 News). In November 2025, it announced an "entirely new asylum model" and plans to cut asylum spending by £1 billion a year by 2028 (Public Accounts Committee). Since 2 June 2026, the Home Office has had the legal power to provide housing to asylum seekers who are destitute or about to be (GOV.UK).

Andy Burnham has been pushing on this issue for years. Back in November 2018, he criticised the "mounting chaos" of the asylum system, pointing out that demand for asylum housing in his region had jumped 58% since April 2014 (The Guardian). His current plan follows from that long-standing complaint: if housing is concentrated where rent is cheapest, then paying more should open up areas that have so far been left out.

The proposal has already faced pushback. Joe Robertson, a Conservative MP for the Isle of Wight, said Burnham should pick the most cost-effective locations for taxpayers (The Guardian). Karen Bradley, the Conservative chair of parliament's Home Affairs Committee, will play a key oversight role as the policy develops (The Guardian). Imran Hussain, from the Refugee Council, is among the charity and campaign figures weighing in on the debate.

The money side is complicated. The Home Office gives contracts to private companies, which then find landlords willing to rent their properties. A funding instruction document for 2025-2026 provides money to local councils to help cover the costs of supporting asylum housing in their areas, running through to 31 March 2026 (GOV.UK). Asylum seekers in rental housing received £48 a week in March 2026, while those in hotels received £9.95 per person (The Guardian).

The trade-off is simple to describe but hard to solve. Paying higher rents to landlords in wealthier areas would spread asylum housing more evenly, according to the government's own analysis. But it would also raise the cost of housing each person, which could eat into the £1 billion already saved.

The question the Home Office now faces is whether it can keep those savings while also spreading housing more widely. If it leaves the rent cap where it is, asylum housing will keep clustering in the poorest areas — an imbalance that regional leaders like Burnham have been fighting for nearly a decade.