The UK government’s emergency use of hotels to house asylum seekers has turned into one of the most expensive stop-gap measures in modern public spending, with total costs projected to exceed £15.3 billion over the lifetime of current contracts. Originally conceived as a temporary response during the COVID-19 pandemic, hotel accommodation has instead become the backbone of Britain’s asylum housing system, according to a recent report from the Home Affairs Committee. Lawmakers say the system spiralled out of control because of poor planning, weak contract oversight, and the Home Office’s failure to expand lower-cost accommodation in time.
From 2019 onwards, the UK saw a sharp increase in asylum applications, fuelled by global displacement, small-boat Channel crossings, and lingering pandemic disruptions. As local housing networks filled up, the Home Office began booking hotels across the country. What started as a short-term fix quickly became standard practice. By mid-2024, around 38,000 asylum seekers were living in hotels, with a previous peak of more than 56,000. At the same time, the total number of asylum seekers receiving government support rose above 110,000, putting unprecedented strain on an already overstretched system.
According to the National Audit Office (NAO), the use of hotels accounted for roughly three-quarters of the total accommodation budget by 2024/25. Spending on hotels reached around £1.3 billion in just the first seven months of that financial year, while the broader asylum support bill hit nearly £4.7 billion in 2023/24. Although costs eased slightly the following year, they remained extraordinarily high, approximately £2.1 billion, or £5.8 million per day. The government insists these figures are now falling, but the NAO warns that progress will depend on how quickly people can be moved into alternative housing.
The geographic spread of hotels has been nationwide. By June 2025, there were still 210 hotels in use across England, Scotland, Wales, and Northern Ireland. Councils have repeatedly complained about being notified at short notice when large groups of asylum seekers were moved into their areas, leaving local services scrambling to respond. Some communities reported strains on healthcare, schooling, and housing resources. Others saw rising local tensions linked to misinformation and the visibility of hotels as de facto migrant hostels.
The cost escalation has several causes. First, the asylum backlog created a bottleneck: with claims taking many months or even years to process, people were stuck in temporary rooms far longer than intended. Second, the unit cost of hotel accommodation around £170 per person per day, dwarfed that of traditional “dispersed accommodation” such as rented flats or shared houses, which average around £27 per day. Finally, auditors cited poor procurement practices and weak contract management inside the Home Office, which allowed private contractors to negotiate lucrative terms without adequate performance monitoring.
Beyond the numbers, the human impact of the hotel system has been severe. Charities and inspectors have documented overcrowding, inadequate food, limited access to healthcare, and mental health issues among residents. Many hotels were never designed for long-term stays, and families often lived in single rooms without cooking facilities or privacy. Safeguarding incidents, including self-harm and exploitation risks, have been reported. The Home Affairs Committee called the conditions “unsuitable for prolonged residence” and accused the government of failing both taxpayers and vulnerable people.
Ministers acknowledge the system is unsustainable but blame the previous administration and surging global migration pressures. They say the government is accelerating asylum decisions, expanding dispersal housing, and trialling large accommodation sites to reduce hotel reliance. The stated goal is to close all asylum hotels by 2029, though many observers doubt the timeline is realistic without substantial investment in affordable housing and local partnerships.
The £15 billion figure, auditors note, is not a single-year sum but the projected total for the decade-long accommodation programme. Even so, it represents an extraordinary drain on public funds, roughly equivalent to the annual budget for the Department for International Development before it merged with the Foreign Office. As one MP put it during the Commons debate, “We have built a hotel empire instead of a housing system.”
Ultimately, the asylum hotel saga illustrates how emergency measures can harden into long-term dependence when structural problems go unresolved. A mix of policy drift, contract mismanagement, and chronic underinvestment in housing has turned a short-term crisis response into a multi-billion-pound liability. As the government looks to reset asylum policy and restore fiscal credibility, the lesson is clear: temporary fixes come with permanent costs, both financial and human.
