Home Office boasts that 20,000 asylum seekers and refugees are being moved out of hotels - but most are being moved to private rented homes as young families battle to get accommodation and communities fear ghettos growing in their midst

The Home Office announced yesterday it had moved 20,000 asylum seekers out of hotels, with most moved into private rented homes sourced by officials. 

Home Secretary James Cleverly claimed the closure of 150 asylum hotels shows the government is 'delivering' on its plan to phase out their use and switch over to cheaper accommodation. 

Some residents have moved into one of the government's two large accommodation centres, the Bibby Stockholm barge and MoD Wethersfield in Essex, but given both sites have a capacity of just 1306 most are now in residential homes.  

The Home Office has secured around 16,000 rental properties for asylum seekers, prompting controversy due to the acute shortage of homes for young Britons and families. 

Officials have also warned that the move could create 'ghettos' as these properties have been concentrated in areas where properties are cheaper, such as Hull, Bradford and Teesside.

Contractors employed by the Home Office, including Serco, have been offered landlords five-year leases with 'rent paid in full, on time, every month, with no arrears', as well as full repair and maintenance, except for structural defects, the Telegraph previously reported. 

The homes come from the same pool as those in the private and social rented sector, and are currently 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.

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.

One insider said 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 said. 

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.

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

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.

Mr Cleverly revealed yesterday that there are now 36,000 migrants being accommodated in hotels at the taxpayers' expense, compared with a peak of 56,000 last September.

Contracts with 100 hotels have already been terminated by the Home Office, allowing the properties to be returned to normal use.

Mr Cleverly announced that another 50 will close to migrants by the beginning of May.

'We promised to end the use of asylum hotels and house asylum seekers at more appropriate, cheaper accommodation; we are doing that at a rapid pace,' he said.

'These closures deliver on the government's plan to cut the use of hotels in the asylum system and we will keep going until the last hotel is closed.'

The 36 per cent fall in the number of migrants in hotels is based on provisional data, with final official figures due to be published at the end of next month, officials said.

Migrant hotels were costing the taxpayer more than £8million a day at their peak.

Last month a report by spending watchdog the National Audit Office said ministers' plans to house migrants in basic accommodation will actually cost £46million more than hotels.

It said former military bases and the barge will carry a £1.2billion price tag.

'The Home Office originally assessed that large sites would be around £94million cheaper than hotels,' an NAO spokesman said.

'Its latest estimates suggest they will cost £46million more than using hotels.' There was a number of reasons for the increase, the NAO said, including a vast underestimate of how much it would cost to set up Scampton and another base at Wethersfield, Essex.

The Bibby Stockholm cost £14.5million to set-up and lease, and - including running costs - will have cost £35million in total by next March.

At the end of December there were still 48,500 migrants in hotels but the Home Office was also keeping a 'buffer' of 18,000 empty hotel rooms.

In February it emerged that migrant hotels and other asylum support would cost the taxpayer £5.4billion in the 2023-24 financial year - a staggering £15million a day.

The sum includes those living in self-catering accommodation, who receive £49.18 a week for each person in their household to cover food, clothing and other costs.

A Home Office spokesperson previously 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.'