The X Factor finalists will live in central London this year because bosses want more drama.
Show chiefs are said to feel last year's contest was "flat" because the hopefuls lived far out of the city and so, with the exception of hard-partying Frankie Cocozza, most of the contestants preferred to stay in the show house and rehearse and it is felt the programme needs to be made more exciting and "cool".
The move, provisionally to the Corinthia hotel, is said to be designed to create an "army of Frankie Cocozzas" having the "time of their lives".
A source told The Sun newspaper: "'The X Factor' is supposed to be a cool programme, with young people having the time of their lives. Last year it was decidedly flat - only Frankie got up to anything newsworthy and he ended up pushing it too far.
"But he had the right idea. Pop stars don't stay in and 'work on their vocals', that's just rubbish. They go out and get trashed and fall out of nightclubs."
However, programme bosses are keen to stress that they don't want contestants taking things too far, following Frankie's axe from the contest after he boasted about his drug use.
The source added: "No one is saying we want to be irresponsible, but if you're over 18, you should be allowed to do as you please as long as you keep within the show rules and don't cause problems for anyone else."
