Landlord raking in millions from asylum crisis

A London landlord is making more than £2million a year by cashing in on the asylum crisis.

Cypriot-born Savas Stavrou, 69, has built up a business empire providing basic accommodation for councils struggling to find beds for the record numbers seeking refuge in the capital.

An Evening Standard investigation can reveal that he:

* Owns more than 20 major properties, including hotels and guesthouses on the doorstep of the immigration headquarters in Croydon

* Has seen company profits jump from £134,000 a year to £2,354,000 in four years

* Controls a company worth almost £10million from an office in a parade of shops in Streatham

* Regularly adds to his property portfolio, often buying new houses in cash

Mr Stavrou's business, Ledra Services, is doing nothing illegal, merely exploiting the massive need in the British housing market created by asylum seekers, of whom there were 100,000 last year.

The Home Office insists all contracts with private landlords are tested to check they provide value for money and meet basic living standards. But a spokesman admitted: "We have no control over how much money a company is making."

However, the massive scale of profits made by Mr Stavrou dismayed shadow home secretary Oliver Letwin. "This is yet further proof that the asylum system is a complete disaster," he said. "It is costing the taxpayer huge sums in wasted money. The only way forward is to scrap it and replace it with a quota system for genuine refugees."

Asylum minister Beverley Hughes insists the Home Office is making "real progress" in deporting more asylum-seekers whose claims were rejected.

But a report from a Labour-dominated committee of MPs today warned that spiralling numbers of refugees could " overwhelm" Britain and trigger "social unrest". The Commons Home Affairs Committee took the unusual step of publishing the report on deportations only hours before it was set to grill Ms Hughes on asylum applications.

Since 1997, when Mr Stavrou set up in business, he has grown rich on a steady stream of refugees from the world's trouble spots. In parts of London he owns several properties in the same street, and one of his managers suggested his B&B empire now stretches to more than 40 houses, hotels and flats. The manager of one of his largest establishments said: "We have mostly asylum seekers in this hotel, they come from all over the world.

"It used to be people from Eastern Europe, then it was Afghanistan, now it's from the Middle East. They stay for about six months so we don't often rent rooms to tourists."

A Home Office agreement with councils enables them to pay up to £350 a week for a room whatever its condition, provided it is going to an asylum seeker. The business of housing London's 55,000 asylum seekers has become so lucrative for private landlords that the "no vacancies" signs are a permanent fixture in some of Mr Stavrou's properties. One council that regularly uses the company paid £6,080 to house one foreign mother and her baby for 160 days.

Asylum seekers must live by strict rules.

In the reception area of one of Mr Stavrou's properties in Babington Road, Streatham, are two registers, one from Lambeth council for immigrants and one from Wandsworth Housing. Large signs in English remind residents they must sign the register every morning and evening, or risk losing their rooms. They are not entitled to work while their claims for asylum are being processed but, in the culture of delay which has gripped the system, few checks are made.

A source close to Mr Stavrou's business said: "During the day most of the young men go off to jobs in the black economy. But it is not up to private landlords to force them to stay inside." The duty to monitor the movements of asylum seekers falls to officials from Nass, the Government's National Asylum Support Service.

London councils must provide support for the thousands who arrived before April 2000. In theory, boroughs can claim back from the Government the money they spend housing asylum seekers. But London's crippling accommodation costs have left authorities badly out of pocket.

For Mr Stavrou, his wife Margaret, who acts as company secretary, and son George, a company shareholder, the system's delays have been the source of remarkable profits. Within a 10-minute walk of their office are a dozen of their properties, including three in one tree-lined street where homes regularly sell for £300,000.

However, Mr Stavrou and his family live in a £1 million threestorey detached house in Wimbledon. Approached twice by the Standard, he refused to discuss the success or nature of his business. "I am too busy, why should I talk about it?" he said.