The "placing" of asylum seekers at a hotel in Home Secretary Priti Patel's constituency was "an error", the Home Office has said.
A spokeswoman said alternative accommodation had been sought after an "operational failure" led to the migrants staying at Rivenhall Hotel in Witham, Essex.
The statement was in response to a video shared by former UKIP leader Nigel Farage of him at the hotel.
A full review is being carried out.
Mr Farage posted a video on Twitter of him being driven to the hotel and asking if there were any rooms available. The former MEP was asked to leave the private property shortly after.
Asylum seekers should be placed in urban areas which encompass a number of cities or towns so that they can access support easier, the Home Office said.
Witham is a town between Chelmsford and Colchester with a population of 25,353, according to the 2011 census.
A spokeswoman for Rivenhall Hotel, which has 53 rooms, said they would not be commenting on the matter.
A Home Office spokeswoman said: "On Friday afternoon [14 August] the Home Office became aware that an error was made in placing asylum seekers.
"This error was the result of operational failures where the correct policy and procedures were not followed.
"The Home Office has a statutory obligation to provide asylum seekers who would otherwise be destitute with accommodation. But they should be placed in major conurbations wherever possible so that appropriate support and services can be more readily provided.
"As this is not the case in this instance, alternative accommodation provision has since been sought in accordance with the Immigration Asylum Act 1999 and the Asylum Support Regulations 2000.
"A full review of this operation is now being conducted."
The statement said the Home Secretary was "not informed" of the decision.
The Home Office said there was "a failure to recognise that Rivenhall was not in a major conurbation, and a failure to ensure that appropriate engagement had taken place with council officials and other service providers".