The UK government acknowledges public frustration over the strain the asylum system places on housing, particularly the competition between the Home Office and local councils for temporary accommodation. Business Secretary Jonathan Reynolds stated the solution involves increased housing construction, faster asylum processing, removal of those ineligible to remain in the UK, and curbing small boat crossings. This follows criticism from the Conservatives regarding Labour leader Sir Keir Starmer's assertion of ample housing availability in many local authorities for homeless families. Shadow Housing Secretary Sir James Cleverly claimed that Starmer's comments amplified existing public frustrations. Recent demonstrations outside a hotel in Epping used to house asylum seekers highlight the ongoing tension.

The situation involves significant financial implications; local councils spent £2.3bn on temporary accommodation in 2023-2024, with an 11% increase in those requiring such housing. While the Home Office reports decreased spending on asylum seeker hotel accommodation (from £3bn to £2.1bn between April 2024 and March 2025), concerns remain about the competition for resources between asylum seekers and the homeless population. A total of 32,345 people were housed in asylum hotels as of March 2025. The government aims to eliminate the use of hotels for asylum seekers, decreasing the number used from 400 to 200. However, Reynolds emphasized that the core issue is processing claims more efficiently and removing those without the right to remain in the UK.

Impact Statement: The ongoing housing crisis in the UK, exacerbated by the asylum system, necessitates a multi-pronged approach involving increased housing supply, efficient asylum processing, and effective border control.