The government's new immigration bill will lead to a "bonanza" for unscrupulous landlords and the widespread discrimination against foreign tenants, MPs have warned.
The new regulation, requiring landlords to check the immigration status of all tenants, will cause many to simply turn migrants away rather than risk losing them further down the line, according to a new report by the Commons' Home Affairs Committee.
"There is a possibility that landlords will discriminate against all immigrants regardless of their status rather than take the risk of housing a person without right to remain," MPs say.
They point out that there are over 404 legitimate European identity documents alone, making it almost impossible for landlords to be confident of their tenants' immigration status.
They also warn the regulation will drive many vulnerable migrants into the "twilight worlds of beds-in-sheds" and suggest that some landlords will turn the situation to their own advantage.
"There is also a possibility that unscrupulous landlords will hold tenants who are suspected of being an illegal immigrant to ransom," they claim.
MPs criticised the government's controversial pilot of "go home vans" which they describe as "menacing" and welcome the decision to scrap the scheme.
They also "remain to be convinced" of the Home Office's policy of sending text messages to migrants suspected of overstaying their leave.
The scheme caused controversy earlier this year after it was revealed that many people had received the messages in error.
MPs also raised concerns over the number of complaints still received about the use of force by guards in immigration detention centres.
"It is completely unacceptable that, even after the death of Jimmy Mubenga, the Home office continues to receive dozens of complaints each year about potential breathing difficulties caused by the use of physical force in immigration detention centres and on removal flights."
The committee highlighted findings that just six per cent of reports of illegal immigrants had resulted in an investigation and only one per cent had resulted in illegal immigrants being removed.
They say more needs to be done to give the public confidence that their reports will be taken seriously.
"There are still over 430,000 cases languishing in the backlogs, enough to fill Wembley Stadium almost five times over," Committee chair Keith Vaz said.
He claimed the committee's findings higlighted major failings at the UK Border Agency and the Home Office.
"This has been a chaotic summer for immigration policy."