Labour's asylum 'amnesty' will drive up rent prices for families struggling to find a home, a scathing report has revealed.

The Home Office has vowed to stop housing asylum seekers in hotels.

But they have also refused to use large-scale accommodation sites, insisting they will process more claims and shift migrants into "dispersal accommodation".

This will drive up rent prices and increase homelessness, the Public Accounts Committee has warned.

The admission comes in a shocking report which also revealed the Home Office - under the Conservatives - splurged £15.4 million on a derelict prison to house 1,400 asylum seekers - only to later abandon the plans because they were unworkable.

The cross-party committee said the Government body ignored expert advice available at the time during its bid to buy former HMP Northeye in efforts to secure 1,400 bed spaces, and bypassed processes to protect public money.

Committee chairman, Sir Geoffrey Clifton-Brown, said: "Northeye was one of a series of failed Home Office acquisitions for large asylum accommodation sites, totalling a cost to the public purse of almost £100 million of taxpayers' money.

"Treasury rules for safeguarding public money are there for a reason and should only be overridden in extreme circumstances. This case clearly demonstrates why those safeguards should normally be followed."

He added: "The Home Office says it has learned the lessons from its disastrously managed acquisition of the Northeye site. These are lessons for which the taxpayer has paid a steep price."

The findings come after a Whitehall spending watchdog, the National Audit Office, also said the Home Office's attempt to acquire the Northeye site in a few months led to cut corners and a "series of poor decisions".

The latest report on Wednesday said while the Home Office identified "over 1,000" lessons from its acquisitions of large asylum accommodation sites, committee members remain to be convinced it can put learning into practice.

The report added: "Given that some of these 'lessons' should have been evident at the time, we are concerned about the Home Office's ability to put that learning into practice and prevent such an unacceptable waste of public money from happening again."

The Home Office was told repair costs for the former prison in Bexhill-on-Sea would exceed £20 million.

This is after they spent £15.4m on the site - double the cost the previous owners had paid just 12 months previously.

The Public Accounts Committee also confirmed the Home Office spent £34million on the Bibby Stockholm asylum barge, "which housed far fewer asylum seekers than expected", £60m on a large site accommodation site at the former home of the RAF Dambusters, £2.9m on a similar scheme in Linton-on-Ouse and £715m on the Rwanda scheme.

But efforts to slash the hotel bill for asylum seekers could lead to severe consequences elsewhere, MPs warned.

They wrote in a new report published today: "The Home Office's efforts to reduce its reliance on hotels could continue to have unintended consequences, such as increasing homelessness and placing unacceptable financial pressure on local councils by driving up rental prices."

They added: "We are also concerned about the Home Office's ability to fulfil its duty to safeguard public money and tackle the backlog of asylum claims without pushing problems and costs elsewhere.

"For example, by taking up rental accommodation that is in short supply and desperately needed."

The Home Office splurged £5.38bn on accommodation and support for asylum seekers last year - up £1.43bn from the year before.

Spending on asylum rose by £1.43 billion, up 36% from £3.95 billion in 2022/23 to £5.38 billion in 2023/24.

It is more than four times the equivalent figure for 2020/21 (£1.34 billion) and nearly 12 times the total a decade ago in 2013/14 (£0.45 billion).

Some 29,585 asylum seekers were staying in taxpayer-funded hotel rooms, as of June 30.

But this has increased to 35,651, it has emerged.

A total of 133,409 people were waiting for an initial decision on an asylum application in the UK at the end of September 2024.

This is up 12% from 118,882 at the end of June 2024, but down year on year by 19% from 165,411 at the end of September 2023.

The number peaked at 175,457 at the end of June 2023, which was the highest figure since current records began in 2010.

The number of people waiting more than six months for an initial decision stood at 83,888 at the end of September, up from 76,268 at the end of June, but down year-on-year by 33% from 124,461.