Liverpool finds itself on the frontline of the bitter battle over asylum housing, as the Government shifts away from hotels and places more migrants in houses in multiple occupation (HMOs).

The Labour-run council have declared “war” on HMOs in the city – promising to crack down on the further spread of family homes being converted into bedsit-type flats.

High concentrations of HMOs are leading to overcrowding, more rubbish and pressure on local services, say councillors angry at the impact on deprived parts of the city.

Landlords converting Liverpool’s traditional terraced homes into HMOs to squeeze out extra profit have been accused of having “pound signs in the eyes” and little regard for communities.

Council leaders say the problem is much wider than the housing of asylum seekers, since HMOs are mostly used by students, transient workers and people on housing benefit.

However, speaking to Liverpool residents in the Tuebrook area, it’s clear that asylum seekers and other migrants – such as those with refugee status – have captured the most attention when it comes to the HMO issue.

‘They’re not putting people in posh areas’

“There’s eight people in one [HMO] in my street,” said Tuebrook resident Denise Hurley. “I don’t know if it’s asylum seekers or other migrants.”

“There’s so much more rubbish, and it’s thrown about everywhere. So no wonder there’s rats running around,” added the 66-year-old.

“It seems like there’s lots of asylum seekers in the area now. Because they’re hanging around not doing anything. It’s changed the area. I think it would be better to have them in hotels – at least they’re contained.”

Patricia Allen, another Tuebrook resident, said: “They’re not putting people [asylum seekers] in nice, posh areas, are they?”

“It’s not that I’m against people coming from different countries,” said the 77-year-old. “It means there’s more people coming and going that you don’t know. They don’t seem to be settling and integrating. There’s not enough school places or the services here.”

Landlords accused of ‘disgusting’ behaviour

Not everyone agrees. Speaking outside The Flat House pub in Tuebrook, one 66-year-old Labour voter, who did not want to be named, said: “The asylum seekers and migrants I speak to are sound.

“They do settle in the community over time, if they’re given the chance,” the pub-goer added.

“I worry about the HMOs from the point of view that landlords are making more dough and exploiting people by cramming more people into houses. That’s disgusting. But it’s not migrants fault. It’s the Government’s fault for allowing it.”

Billy Lake, Liberal Party councillor for Tuebrook Larkhill, said landlords “have pound signs in their eyes” when it comes to converting three-bedroom family homes into five-bedroom HMOs.

“Neighbours are concerned about extra noise, extra rubbish, less parking spaces. Asylum seekers are only part of it – it’s a wider problem than that,” said Lake.

“I don’t think it’s outright hostility toward outsiders,” he said of local frustration. “But there is a changing demographic people are concerned about because it’s so transitory. People are moving in and out a lot. So it’s become a less settled community.”

Liverpool council’s ‘war’ on HMOs

Hetty Wood, the Labour cabinet member for housing in Liverpool, said asylum seekers were “only one part of a much wider housing picture”, adding that there was a risk of “unfairly blaming particular groups of people”.

Wood recognised residents’ “serious concerns” about HMOs. But she said the council’s plans to expand planning regulations would help ensure “future growth [of HMOs] is properly managed”.

Liverpool introduced an Article 4 order across much of the inner city in 2021. It forces landlords – who already need a license to operate a HMO – to also get planning permission to convert a home.

The council now plans to cap HMOs at no more than 10 per cent of properties in any ward, with Labour council leader Liam Robinson saying it amounted to “war”.

However, Lake and his fellow Liberal councillor Joe Dunne believe rogue landlords are still setting up HMOs unlawfully. They have found some advertising rooms online without either a licence or planning permission.

“Article 4 is nothing unless you have the will to really enforce it,” said Dunne. “It’s a mess.”

Shift from hotels to HMOs

The number of asylum seekers in hotels across the UK is down from around 32,000 to 16,000, according to the Home Office’s latest quarterly figures.

However, asylum seeker numbers in “dispersal” housing in the community – which includes HMOs – has gone up from roughly 65,000 to 69,000.

Serco and other companies contracted by the Home Office to house asylum seekers have been reaching out to private landlords to lease more of their properties in communities.

Liverpool has 16,494 people in HMOs – the second-highest number in England, according to Government statistics.

However, asylum seekers still appear to be a relatively small part of the huge HMO sector in the city. Liverpool currently has 1,385 asylum seekers in “dispersal” housing – the second highest anywhere in England.

Why HMOs are ‘lucrative’ for landlords

Ian Taylor, director of Taylor Almond property management company, has worked with fully compliant HMO owners. Conversions have been “lucrative” for some, he told The i Paper.

A typical three-bedroom terrace house could be rented for around £1,000 a month, Taylor explained. Turning it into a HMO means renting to five people and up to £2,000.

Landlords typically cover around £500-worth of bills in this sort of five-room HMO, said Taylor. But there is still chance to make £500 more than they would have done with the standard £1,000 rent.

They may make slightly less than that with Serco, the Home Office’s asylum housing provider in the north-west, said Taylor. But some are attracted to the stability of a five-year-contract with the company since it takes on responsibility for repairs.

Taylor said “good-quality HMOs” were still needed in the city, arguing that asylum housing was “only a small part of the sector”. He suspects that much of the concern about it in places like Tuebrook may be a misunderstanding about new, economic migrants moving into an area.

“It’s an easy bandwagon to jump on. People might look at an outsider, someone not from England, and think, ‘They must be an asylum seeker’.”

James, 47, from Kirkby, said more HMOs were “popping up” in his area, on the outskirts of Liverpool. “It’s not all asylum seekers – I get that. But there are more single men that are hanging around in the streets,” he said.

“There’s frustration that asylum seekers are basically getting free housing, when you have a lot of people struggling to get a house. I’m not right-wing, I’m not left wing. It’s not a racist thing.”

Serco said it had not rented any new HMOs in Liverpool since the Article 4 direction in 2021. “We work under the direction of the Home Office, who decide where people are placed, based on overall national demand,” a spokesperson said.

The Home Office has reduced the overall sum spent on asylum accommodation and support from £4.51bn to £4.18bn in 2025-26.

Ahead of the Budget, it is under pressure to further cut costs. With the Government keen to find ways to boost defence spending, it could mean more cuts for unprotected departments like the Home Office at next year’s spending review.

Dr Peter Walsh at the University of Oxford’s Migration Observatory said there had been “progress” on getting hotel numbers down. Hotels are six times as expensive as HMOs and other “dispersal” housing, according to Migration Observatory analysis.

However, Maxwell Marlow of the right-wing Adam Smith Institute think tank, believes Labour may come to regret the push toward HMOs. Hotels are contained in town centres, but placing people in residential areas becomes a “potential flashpoint for tensions”, he said.

A Home Office spokesperson said the Government still aimed to close every asylum hotel by the end of this Parliament. “We are moving asylum seekers into alternative accommodation, including former military sites, to reduce impact on local communities.”