A pilot scheme, backed by £100 million from the Home Office, will see asylum seekers housed in newly built or refurbished council homes. Approximately 900 new homes are planned. Initially, these properties will be leased back to the Home Office, but they will eventually be integrated into the general social housing stock for the wider community once the asylum backlog is resolved. This initiative is part of an effort to move away from costly hotels and private rentals, where a significant number of asylum seekers are currently housed.
Several Labour-led councils, including Brighton and Hove, Hackney, Peterborough, Thanet, and Powys, have expressed interest in participating. Council leaders involved in the scheme argue it will be a "win-win" situation, saving money in the long term by providing better support through local services and increasing the flexible housing stock. They also see it as an opportunity to phase out contracts with private companies that manage asylum accommodation.
However, the scheme faces criticism due to England's extensive social housing waiting lists, with over 1.33 million households on them. Critics, including some local council leaders and political groups, warn that this plan could lead to public anger and create conflict between asylum seekers and local residents struggling with housing shortages. Concerns have been raised about redirecting anti-migrant sentiment towards local councils. Some Labour MPs, however, support the shift, advocating for a fairer distribution of asylum seekers and challenging the idea that deprived areas should disproportionately host them due to lower private rental costs. The Home Office maintains it is seeking "suitable" alternatives and aims to close all asylum hotels.