A young man lounges under a beach umbrella in shorts, the sunny Dubai skyline visible over his shoulder. You, too, he tells his followers, can live the millionaire lifestyle plastered all over his social media accounts; the secret is housing vulnerable people at the taxpayer’s expense. The TikToker Luigi Newton, who says he started out working in a call centre and now manages a string of mostly social housing properties remotely from overseas, is just one of a new breed of landlord influencers boasting about the supposedly rich pickings to be made from buying up and renovating cheap housing to rent to social housing providers, ensuring a steady, hassle-free stream of government-backed income dropping into their accounts.
In one video, Newton admits he’s had flak online because one of his main clients is the outsourcing giant Serco, which mostly houses refugees: to him that’s a good thing, he says earnestly, because he feels he’s “really helping” people who need housing in desperate circumstances. But, perhaps more to the point for some of his followers, he reckons it’s more lucrative than renting to working professionals, thanks to the way the leases work.
If there’s something disturbing about seeing Britain’s asylum crisis framed as a get-rich-quick scheme, TikTok landlords are in many ways the least of anyone’s problems. They’re just small fry, the most visible and least subtle end of a much bigger corporate phenomenon; an under-examined corner of the property market, responding perfectly logically to the incentives inadvertently created by a blundering state. Welcome to the asylum and immigration scandal you rarely hear about: the one that isn’t actually about asylum seekers, but about political failure, and the middle men turning a tidy profit on the consequences.
This week, a blistering report from the Conservative-chaired home affairs select committee accused the Home Office of wasting potentially billions of pounds of taxpayers’ money on a 10-year contract with three providers to house asylum seekers in private rented properties and, more controversially, in hotels. Since it’s more obvious to resentful locals when the place they once held their wedding receptions starts hosting large groups of young male asylum seekers than when the tenant in some anonymous bedsit changes, the shift to hotels that has been politically toxic. But it’s also been vastly more expensive.
The committee found that the estimated costs for the deal signed in 2019 with three big providers – the aforementioned Serco, plus Clearsprings and Mears – have tripled from £4.5bn to an eye-watering £15.3bn. The Home Office was so focused on “high-risk, poorly planned” wheezes such as sending asylum seekers to Rwanda, the committee found, that it lost control of the basics, including the day-to-day business of managing all the asylum seekers stuck in limbo while it chased political rainbows. Or, to put it another way, tough talk turns out to be not only a cruel but a surprisingly expensive political substitute for actually doing something.
The human consequences of all this are painful. Taxpayers’ money that could have gone into something infinitely more life-enhancing has seemingly been wasted. Traumatised people have spent years cooped up in hotel rooms never designed for the purpose, increasingly fearful of the angry protesters gathering at the gates, while the far right has found itself a powerful grievance. And yet still Whitehall finds itself locked into contracts that aren’t delivering for anyone. There’s an asylum scandal here all right: just not one that Reform or the Tories are enormously comfortable talking about, for all their much-touted antipathy to waste.
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Where exactly did all those billions go? Some will have gone to landlords, but over half of the 2024-25 asylum support budget went to hotels, which were originally used as a temporary quick fix for housing vulnerable people – not just asylum seekers, but homeless people or victims of domestic violence – during the pandemic when the tourist trade dried up, but which have become a permanent fallback. Is it entirely a coincidence that, as the committee found, hotels also seem to be more lucrative for the big providers? And then there are the signs of worryingly sloppy management by the Home Office identified in the report: though under the terms of the contract the providers were meant to keep 5% of the profits, returning any excess to the taxpayer, the committee calculated there was at least £46m lying in corporate bank accounts that the Home Office hadn’t chased up. Meanwhile, a National Audit Office spot check found invoices paid by the Home Office for beds that turned out not to exist.
But following the money doesn’t, in this case, simply take us to the billions spent through badly managed contracts. It also takes us to the public money that didn’t get spent on making the asylum system fit for purpose – the original false economy that got us into this mess. Britain would never have needed to corral so many human beings into hotel rooms for years on end if it had been processing asylum claims within six months. That’s hardly an unreasonable goal: it was met for 87% of applicants in 2014, but by 2023, the six-month decision rate had collapsed to just 16%, leaving applicants to languish far too long in a state of uncertainty. Successive post-Brexit governments chose bluster, blaming activist lawyers instead of spending enough to ensure the system could actually cope.
They wasted years arguing that the answer was deporting asylum seekers to Rwanda, even as it became blindingly obvious the plan was never going to work, and that pausing asylum claims in order to pursue this policy was only making the backlog worse. Now, having bequeathed this shambles to the nation, all the Tories can seemingly do is blame their successors for not sorting it out fast enough. God grant us all the unstoppable self-confidence of a Robert Jenrick, who isn’t going to let the little fact of having been immigration minister when the shift to asylum hotels was under way stop him turning up at protests against these hotels.
There are no easy ways out of this hole. Labour’s plan to close asylum hotels for good by 2029 is at least practical. It involves speeding up the processing of asylum claims, while casting around for a quick and temporary housing solution, most likely on disused military bases. But the committee warns it won’t be easy or painless. It will also involve turning around one of the most demoralised departments in Whitehall. Let’s hope, meanwhile, the lesson learned is broader: cheap fixes, in the end, can cost much more than money.
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