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A family of refugees living on benefits have reportedly been housed in a £1.3 million home by Camden Council.

Saeed Khaliif, 53, and his family came to London from Coventry after deciding they wanted to live in the capital and were previously given a £2 million six-bedroom home in West Hampstead, The Sun reported.

But the family allegedly had to leave the detached house, near to actress Emma Thompson’s home, after the government capped benefits.

Camden Council reportedly then rehoused the family a mile away in a £1.3 million house Kilburn, charging them about £150 a week in rent.

Neighbouring properties are thought to cost up to £750 per week – a total of £3,000 a month.

One neighbour told The Sun the home was extensively renovated with “thousands” spent on it before Mr Khaliif and his family moved in.

Conservative MP Andrew Bridgen said the benefits cap was introduced to stop abuse to the benefits system, adding it looked like the council was “trying to undermine this sensible policy”.

A Camden Council spokesman said: "We do not comment on individual cases.

"Our council homes are allocated on a needs basis in line with our policy and government legislation."

Councillor Sarah Hayward, leader of Camden Council, added: "Camden Council uses council housing to support families who can demonstrate they need help finding a genuinely affordable home. For many of our tenants they need help because they have a specific high level support need like illness or disability.

"Often the support needs of tenants are ignored in debates about social housing.

"In addition, London's economy depends on having access to a broad base of labour from the highly skilled and specialist to more generally lower qualified and lower paid.

"The provision of affordable housing is essential to meeting this Labour demand in addition to our responsibilities supporting vulnerable families facing illness and disability."