UK asylum hotel costs dropped significantly between April 2024 and March 2025, falling by nearly one-third compared to the previous year. Home Office records show the government spent £2.1 billion on hotel accommodation for asylum seekers, down from £3 billion the year before. That translates to an average of £5.77 million per day, compared to £8.3 million in the previous cycle.
BBC Verify attributes the reduction to lower nightly costs per person and broader use of cheaper housing. The government also encouraged more room sharing, which helped cut costs. The average nightly cost per person dropped from £162.16 in March 2023 to £118.87 by March 2025.
The number of asylum seekers in hotels stood at 32,345 in March 2025. While higher than June’s total of 29,585, it was slightly below December’s peak. Officials have shifted thousands into local housing or shared accommodations, including houses in multiple occupation (HMOs), where at least three people share kitchen and bathroom facilities.
A senior Home Office official explained that the department prioritised moving families and children out of hotels first. Many now live in regular housing secured through government contracts with companies like Serco. Contract renegotiations further reduced costs.
Hotel room sharing has also grown. Although exact figures are unavailable, Minister Angela Eagle previously noted that people “can double up or treble up” when room sizes allow.
The number of hotels in use fell as well. In March 2024, the UK operated 273 asylum hotels. By early 2025, that number had dropped by 71.
Despite the cost drop, some analysts remain cautious. Dr. Peter Walsh from the Migration Observatory at Oxford University warned that rising small boat arrivals since March could reverse progress. “I don’t think hotels are going away anytime soon based on current trends,” he noted.
Meanwhile, the Home Office wrote off £48.5 million after the Labour government scrapped plans to convert RAF Scampton into an asylum facility. That project, launched by the previous Conservative government, had already consumed tens of millions of pounds. A department source said the site would have been even more expensive to run than hotels.
The Home Office also confirmed that £270 million paid to Rwanda under a controversial asylum deal will not be refunded. The payment aimed to support Rwanda’s economic infrastructure in exchange for accepting some asylum seekers. Legal challenges delayed the scheme, and only four people agreed to relocate before the Labour government ended the plan.
Rwandan officials have stated they are under no obligation to return the funds. Home Secretary Yvette Cooper confirmed the cancellation, calling the scheme ineffective and costly.
While UK asylum hotel costs are now lower, the long-term outlook remains uncertain. Sustained increases in small boat crossings could push the government to rely on hotels again unless permanent housing capacity expands quickly.
