NRLA hits out as Labour appeals for more landlords to house asylum seekers

In a bid to address the escalating number of migrants crossing the Channel, the Home Office has intensified efforts to secure private rental properties for asylum seekers on lucrative tenancy deals.

The initiative, led by contractor Serco, offers landlords guaranteed five-year leases at full rent, funded by taxpayers, to accommodate the growing number of arrivals.

The deal will also see Serco offering free property management, free utilities and council tax bills and a full repair and maintenance of the property.

Landlords interested in working with Serco should read these previous articles on Property118:

Serco contract was a train wreck!

Should I rent to Serco for 7 years?

However, the National Residential Landlords Association (NRLA), says that the government needs to get its act together to encourage landlord investment with a tax and regulatory regime to support them.

Serco manages more than 30,000 asylum seekers across 7,000 properties and is now actively recruiting landlords in regions like the North West, Midlands and East of England.

Promotional materials highlight ‘on-time rent with no arrears’, free property management and coverage of utilities and council tax.

‘Labour’s shameful failures’

However, the policy has ignited controversy with critics, including shadow home secretary Chris Philp, who argue it prioritises migrants over British people struggling to find homes to rent.

He told the Telegraph: “This lays bare Labour’s shameful failures. Because they have let in record numbers of illegal immigrants so far this year, via Serco the government is offering better than market terms to landlords to house them.

“This is taking away homes that hard-working, tax-paying Britons who are struggling to find a place to rent need.

“Labour is once again giving a better deal to illegal immigrants than people who have lived, worked and paid tax here all their lives.

“These illegal immigrants should have been sent to Rwanda, not put up in nice flats.”

Government must incentivise landlords

The NRLA’s chief executive, Ben Beadle, said: “The government’s reliance on the private-rented sector to house those in the greatest need is nothing new. However, the Home Office’s use of private landlords highlights the growing shortage of available homes and the lack of consistency between government departments.

“Whilst half of Whitehall is scrabbling to hit housing targets and find accommodation for potentially homeless households, the other half seems hell-bent on devising ways to dissuade investment in homes.”

He added: “If the Government is serious about meeting housing need, and growing our way out of the current crisis, then it needs to incentivise investment. Landlords need the confidence that both the regulatory and tax regime will allow them to plan and to flourish.

“Without this the market will continue to stagnate, and demand will further outstrip the limited supply of housing available.”

Record surge in migrants

The government’s push follows a record-breaking surge in small boat arrivals, with 9,638 people crossing illegally this year — a 44.5% increase from 2024 and the highest since 2018.

With warmer weather forecast, officials anticipate further spikes.

The Home Office now supports 65,700 asylum seekers, a decade-high, doubling the 31,000 housed in 2014.

Labour’s strategy, building on a Conservative-era policy, targets houses in multiple occupation, family homes and student accommodation to reduce reliance on costly hotels, which house 38,000 asylum seekers at £5.5 million daily. Private rentals cost £14 per night, compared to £145 for hotels.

Sir Keir Starmer, during the last election, vowed to ‘end asylum hotels, saving the taxpayer billions of pounds’.

Councils and charities warn that the scheme inflates rents, sidelining young workers, families and the homeless.

With 1.3 million on social housing waiting lists, one council leader criticised Serco for ‘encouraging landlords to exploit taxpayers’, impacting local services and cohesion.

A housing executive who has advised the government said homes are being denied to local people, adding: “Whether they are long-term residents of the UK or immigrants, they should surely come ahead of asylum seekers and illegal migrants who turn up and demand assistance.”

A Home Office spokesman defended the policy and told the Telegraph: “These arrangements with the private rented sector have been in place for years, including under the previous government.

“We have a statutory duty to support destitute asylum seekers who will not be able to pay for fees such as utilities and council tax.”