Landlords are being offered thousands of pounds more in rent to house asylum seekers than they would receive for accommodating British families facing homelessness.
A Home Office contractor is offering property owners lucrative three-year deals worth more than double the amount paid by local councils, raising fears that vulnerable tenants could be forced out of their homes.
In one case, a landlord in South London was offered £4,500 a month for a three-bedroom flat he was already renting to Southwark Council for just £1,790.
The bumper deal would have left him £32,520 a year better off, with the contractor also offering to cover bills, council tax and maintenance costs.
But the landlord refused, warning that accepting the offer would mean terminating his agreement with the council and putting families at serious risk of homelessness.
The revelations have sparked fury among opposition politicians, who accused Labour of presiding over an 'outrageous' system that puts migrants ahead of vulnerable Britons.
Rupert Lowe MP and leader of Restore UK, told the Daily Mail: 'This is an absolute betrayal. Young British men and women are struggling to afford their rent, whilst we're accommodating these third world [people] all funded by our own tax. It is a perverse inversion of logic.
'The way to reverse the housing crisis is to deport every illegal migrant, remove the asylum seekers, and ensure that no a single foreign national family is living in British social housing.
'Business owners majorly profiting from his betrayal would be shunned in any fair society.'
A Home Office contractor is offering property owners lucrative three-year deals worth more than double the amount paid by local councils, raising fears that vulnerable tenants could be forced out of their homes. Pictured: The Aylesbury estate in Walworth, south London
Landlords are being offered thousands of pounds more in rent to house asylum seekers
Graffiti sprayed on top of one of the Wendover blocks calls for the authorities to prioritise people over profits
'It's outrageous and under a Reform government this racket will end once and for all. We will put veterans and abuse victims first for housing.'
The eye-watering offers are being made by Clearsprings Ready Homes, one of three private firms contracted by the Home Office to accommodate asylum seekers across Britain.
The company, which has a taxpayer-funded contract worth around £7billion, is understood to be targeting landlords who currently provide accommodation to councils, students and vulnerable people, including those fleeing domestic abuse.
It is hoped that generous rental payments and long-term contracts will encourage property owners to switch their homes into the asylum accommodation system.
But the practice has raised concerns that councils already struggling to find homes for homeless families could be priced out of the market.
One landlord, who already provides accommodation to Southwark Council, told The Sun he was astonished by the difference between the two offers, particularly as both arrangements were ultimately funded through the public purse.
He said: 'I already rent to Southwark Council, and they [Clearspings Ready Homes] are able to offer significantly more than the local authority, which to me is bizarre.
'The council has a ceiling on what they are allowed to pay landlords like myself.
'For a three-bed flat I get £1,790 from the local authority to house families, while I would rent it to Clearsprings for £4,500 per month.
'I didn't go with them because it would have meant terminating my contract with Southwark Council and putting families at serious risk of homelessness. I am not prepared to do that. But many landlords just see it as an opportunity to earn more, and just go with them.'
The landlord, who asked to remain anonymous, also questioned why properties intended for asylum seekers appeared to be subject to more demanding refurbishment requirements than those used to accommodate homeless British families.
A document obtained by The Sun reportedly shows that Clearsprings is seeking additional properties in areas including Bedford, Southampton, the Forest of Dean, Caerphilly and Wrexham.
Under Labour, the number of small-boat migrants who have reached Britain is now larger than the entire British Army (Pictured: A group of migrants attempt to cross the English Channel on September 23)
Prospective landlords are also being told that properties may require extensive refurbishment before they can be used.
Clearsprings is run by multimillionaire businessman Graham King, who has been dubbed the 'Asylum King' after building a fortune from government contracts to accommodate migrants.
The 66-year-old founded the company in 1999 and began providing accommodation for asylum seekers the following year.
He has since amassed an estimated fortune of £726million, while his company has become one of the biggest beneficiaries of Britain's costly asylum accommodation system.
Clearsprings, which operates hotels, houses in multiple occupation and former military sites, is estimated to be responsible for housing around 30,000 asylum seekers.
Its latest accounts, filed last November, showed profits of £62.6million in the year to January 2025, on turnover approaching £1.4billion.
The company is one of three major contractors responsible for providing asylum accommodation under deals awarded by the Home Office in 2019.
Clearsprings covers southern England and Wales, while Serco operates in the Midlands, East of England and North West. Mears Group provides accommodation in Scotland, Northern Ireland and parts of northern England.
The contracts were originally awarded under the Conservatives and are due to run until August 2029.
The National Audit Office has previously raised concerns about the escalating costs of the system.
In a report published in May 2025, the spending watchdog revealed that the Home Office expected to spend £1.67billion on its main asylum accommodation contracts during 2024-25.
Of that, around £903million was allocated to Clearsprings' operations in southern England and Wales.
The revelations come as ministers face mounting pressure to end the use of taxpayer-funded hotels for asylum seekers and find cheaper alternatives.
More than 220,000 migrants have crossed the Channel in small boats since records began in 2018, placing considerable strain on Britain's asylum system.
The Government has closed more than 100 asylum hotels as part of efforts to reduce the accommodation bill, with some residents instead moved into residential properties and former military facilities.
However, the latest revelations raise questions about whether the drive to move migrants out of hotels risks creating further pressure on Britain's already stretched housing market.
The Home Office insisted that taxpayers were protected by contractual limits on how much the Government pays accommodation providers.
A spokesman said: 'We pay a capped and contractually agreed rate to accommodation providers.
'Any amount above that is covered by the contractor and not taxpayers. We are working to fairly house asylum seekers across the country and closing every hotel, saving taxpayers over £1billion on asylum support since the election.'
The department also said it had removed 80,000 people with no right to remain in Britain since the general election.
Clearsprings Ready Homes and Southwark Council were approached for comment.
Lettice.bromovsky@dailymail.co.uk