Asylum seekers have been seen congregating around the statue honouring the Iron Lady in Grantham
Some 70 properties have been turned into homes destined for illegal migrants in Margaret Thatcher's birthplace.
Locals in Grantham, Lincolnshire, have blasted "greedy landlords" for buying up properties to turn into notorious HMOs (houses in multiple occupation) to fit Government plans to move asylum seekers out of hotels and into Britain's streets.
Paul Stokes, the deputy leader of South Keveston District Council, said councillors were told to expect 300 asylum seekers in the area.
But that number had already been surpassed, with most of the migrants in Grantham, he said.
Home Office contractor Serco has bought up a number of properties within the town.
South Keveston District Council has now been granted a "temporary pause" on home purchasing, but Mr Stokes told the BBC he does not know how long it will last.
He said: "There was a further pipeline of properties they were looking to utilise and that has now been stopped."
The council does "want to help people", but it needs to be able to "control how that is done", he added.
Grantham residents said the town had taken "more than its fair share" of migrants, with some locals saying they had been seen causing trouble.
One, a retired factory worker named Steve, told the Mail: "I have no problem with migrants coming over here legally to live and work and be part of the community.
"But it's all the illegal migrants flooding our towns and cities which I object to. Our Government doesn't care about the people living here, they just let in any Tom, Dick and Harry and do absolutely nothing to stop them."
Groups of asylum seekers are seen congregating near the statue of Lady Thatcher, and on the green near the South Kesteven District Council offices and Guildhall Arts Centre.
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One store security guard said he occasionally had issues with the asylum seekers.
He said: "They hang around the green or inside the shopping centre, usually early in the morning, and we have had issues with some and have had to call the police."
He also alleged migrants had been moved out of two hotels on the outskirts of town.
Gareth Davies, the Conservative MP for Grantham and Bourne, said he had spoken to the Government to "raise strong local concerns".
"I am pleased to confirm that the minister has instructed Serco to immediately halt all procurement of dispersed asylum accommodation in Grantham," he added.
South Keveston District Council are set to vote to introduce new controls which would force property owners to get planning permission before converting properties into HMOs accommodating up to six people - a move similar to North Lincolnshire Council, who described the practice of family home conversion as a "loophole".
Similar measures have been raised in the council before, but were either not debated or failed to gain support.
A spokesman for the Home Office said: "This Government is restoring order and control to our borders by removing the incentives drawing illegal migrants to Britain and increasing removals of those with no right to be here.
"We will close all asylum hotels by the end of this Parliament, returning them to local communities and moving asylum seekers into more suitable accommodation, including former miliary sites."
