Refugee housing provider welcomes government’s commitment to end asylum hotels

A provider of supported housing for refugees has welcomed the government’s commitment to end the use of hotels to house asylum seekers by 2029, announced as part of this week’s spending review.

ACH says that while the move represents a much-needed step to address the spiralling financial burden on taxpayers and the inappropriate nature of hotel accommodation, it is calling for a robust and coherent strategy that prioritises genuinely affordable social housing and integrated community solutions.

According to the National Audit Office’s projections, asylum accommodation costs will reach £15.3 billion over the decade (2019-2029) – more than triple original estimates.

In the last financial year (2024-25), £1.3bn was spent on hotel accommodation, accounting for 76% of all asylum accommodation costs.

Housing over 32,000 asylum seekers in hotels is not only fiscally irresponsible but also profoundly detrimental to the well-being and integration prospects of individuals seeking safety, ACH says.

Fuad Mahamed, CEO of ACH, said: “The commitment to end asylum hotels is a crucial acknowledgement of the current unsustainable crisis.

“These hotels are not only hugely expensive, costing taxpayers billions, but they also isolate vulnerable individuals, hindering their ability to integrate into society.

“We cannot simply shift people from one inappropriate temporary solution to another. The government must deliver on its promise to build new, suitable accommodation and process claims efficiently to prevent further limbo and expenditure.”

According to ACH, any plan to transition away from hotels must be accompanied by a significant and accelerated investment in alternative, community-based housing that promotes self-sufficiency and integration, including:

• Swift and fair asylum processing: reducing backlogs is key to enabling individuals with status to move into settled accommodation and those without to be returned
• Expansion of quality, dispersed accommodation: utilising properties within communities, such as former student accommodation or repurposed blocks, can provide more stable and humane living conditions
• Robust support services: ensuring access to essential services, language training, and employment support from day one for all individuals.

CEO Mahamed added: “The housing crisis affects everyone, and its impact on the most vulnerable is profound.

“A truly strategic approach to ending asylum hotels must be deeply intertwined with an ambitious long-term plan for social housing.

“By investing adequately in genuinely affordable, permanent homes, we can reduce reliance on emergency accommodation for both settled residents and new arrivals, creating more stable and integrated communities for all.

“This is not just an immigration issue; it’s a housing and public spending issue that demands bold, compassionate, and practical solutions.”