Council Homes Planned for Asylum Seekers in New UK Scheme

Key Points:

• The UK Government launches a pilot scheme enabling councils to build or refurbish homes for asylum seekers.
• Around 200 councils have expressed interest, with Brighton and Hove, Hackney, Peterborough, Thanet, and Powys confirming participation to The i Paper.
• The initiative aims to reduce reliance on hotels and private landlords for asylum accommodation.
• Council leaders welcome the potential to bring housing management back under public control, while critics fear taxpayer backlash.
• Over 1.33 million UK households await social housing — the highest figure since 2014, according to Government data.
• The Home Office currently houses around 100,000 asylum seekers.
• The plan allows councils to buy unsold homes or lease refurbished properties to the Home Office initially.
• Labour has pledged to end the use of hotels for asylum accommodation by 2029.
• Home Office contractors — Serco, Clearsprings, and Mears — seek to cut hotel use amid public protests across the UK.

New council homes will be built under a landmark pilot scheme designed to accommodate asylum seekers and ease the pressure on temporary housing, as confirmed by several local authorities across Britain.

As reported by David Parsley of The i Paper, five councils — Brighton and Hove, Hackney, Peterborough, Thanet, and Powys — have openly expressed interest in joining the initiative, which allows local authorities to either construct new housing or bring derelict properties back into use for asylum seekers.

The scheme, which The i Paper revealed was being tested by the Government, has drawn attention from roughly 200 councils nationwide that are eager to participate. It is seen as a move towards reducing the “scandalous” reliance on hotels and private landlords for temporary asylum accommodation — an issue that has cost the taxpayer hundreds of millions of pounds annually.

What is the Government’s new asylum housing pilot?

According to The i Paper, the Home Office’s pilot will provide local authorities with funding to purchase, refurbish, or build new homes that can be leased to accommodate asylum seekers. Initially, these homes will be leased to the Home Office for use under its asylum accommodation programme, but local councils could later reclaim them as part of their permanent social housing stock.

The pilot has been described as a dual-purpose measure — intended to ease the strain on temporary facilities while expanding council housing portfolios. A source quoted by The i said local leaders viewed the scheme as a “chance to renationalise asylum accommodation” and to lessen dependence on controversial private contractors such as Serco, Clearsprings, and Mears, who currently oversee the bulk of asylum housing contracts.

Why are councils supporting the move?

In comments reported by David Parsley for The i Paper, council leaders indicated strong political and financial incentives for participating. Several local officials reportedly hope that managing asylum accommodation directly will not only improve transparency but also ensure higher housing standards and reduce long-term costs.

One council leader told The i,

“This could be an opportunity to take back control of housing provision, restore public accountability, and add affordable homes to our long-term stock.”

The councils view unused developments and derelict housing as viable routes to increase both social and asylum accommodation capacity. The plan could also allow authorities to buy unsold homes from private schemes, ensuring the effective use of idle property.

How big is the current housing challenge in the UK?

Newly released Government figures show the magnitude of the housing crisis. According to the Department for Levelling Up, Housing and Communities, there were 1.33 million households on social housing waiting lists across England as of March 2024 — a 3% rise compared to 2023 and the highest total since 2014.

Meanwhile, The i Paper notes that the Home Office currently provides accommodation for around 100,000 asylum seekers across the UK. This includes hotels, hostels, and shared houses provided through private contractors under the Asylum Accommodation and Support Services Contracts (AASC).

What have critics said about the new plan?

Despite general optimism among participating councils, critics have raised concerns about potential public backlash. Some fear that taxpayers might oppose the allocation of funds toward asylum housing when local residents face chronic waiting times for social housing support.

As observed in The i Paper’s coverage, certain community leaders warned that the project might provoke “outrage” if it is perceived as prioritising migrants over long-standing residents. The i also reported that anti-immigration protests outside asylum seeker hotels have become increasingly frequent over the past two years — particularly in areas already under housing strain.

Campaigners for housing equality, however, argue the reforms should benefit everyone in the long term by increasing council-owned stock and alleviating pressure on the private rental sector.

How will the scheme reduce reliance on private contractors?

As reported by The Guardian and BBC News, the launch of the pilot follows a series of high-profile investigations into the performance of private asylum accommodation contractors. Firms such as Serco, Clearsprings Ready Homes, and Mears Group have faced criticism over the quality of housing, the extended use of hotels, and the escalating costs to the Home Office.

Home Office officials confirmed to The BBC that these firms are under pressure to reduce their dependence on hotel-based housing and are recruiting private landlords with houses in multiple occupation (HMOs) to expand available placements.

By enabling councils to directly manage or lease properties for asylum seekers, the Government hopes to bypass some of these contractors and establish a more sustainable, publicly accountable system.

What is the political reaction?

According to The i Paper, the scheme also forms part of a broader Government response to increasing political pressure regarding asylum accommodation. The Labour Party has pledged to end the use of hotels for asylum seekers by 2029, citing both cost inefficiencies and community tensions.

Meanwhile, in Parliament, Home Office ministers have faced questions over how new spending on asylum homes will be balanced against unmet housing needs among the UK-born population.

In statements reported by Sky News, opposition MPs characterised the plan as “piecemeal” and demanded a national housing strategy that addresses both asylum accommodation and long-term social housing shortages. The Local Government Association (LGA) also cautioned that councils will require adequate funding and oversight to ensure asylum homes meet regulatory standards.

Could this affect long-term social housing availability?

Under the proposed arrangements, properties leased to the Home Office may eventually revert to local authority control, becoming part of their permanent housing stock. This approach, The i Paper notes, could save local governments money in the long term while increasing the number of affordable homes available to residents.

Housing analysts have suggested that the dual-use model could serve as a blueprint for integrating refugee and public housing strategies nationwide. According to Shelter, the housing and homelessness charity, any expansion in publicly owned housing “must be carefully managed to ensure fairness and transparency” across both groups.

What happens next?

The pilot is expected to begin in early 2026, following formal approval from the Department for Levelling Up, Housing and Communities and the Home Office. The participating councils — including Brighton and Hove, Hackney, Peterborough, Thanet, and Powys — are anticipated to submit final site proposals in the coming months.

If successful, the programme could be expanded countrywide, potentially creating thousands of additional homes managed under local authority oversight. Officials have said this would mark a major shift from the private outsourcing model that has dominated asylum accommodation for the past decade.