Youngsters face a culture of suspicion, and authorities try to avoid taking on their care, a Lords EU committee said.
Their "harrowing" circumstances have led them to lose faith in national authorities, making them easy prey for smuggling gangs, witnesses told peers.
The Home Office says it is helping resettle such children under a new law.
More than 10,000 migrant children are believed to have disappeared after arriving in Europe over the past two years, the EU's police intelligence unit says.
The European Union Committee of the House of Lords criticised the UK government for a "continuing reluctance... to show solidarity with its European partners in helping to relocate such children".
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Nearly 90,000 lone minors sought refuge in the EU in 2015 - a sharp increase compared with just over 23,000 in the previous year.
In the UK last year there were 3,043 applications from unaccompanied asylum-seeking children - an increase of 56% on the number in 2014.
The committee also said:
Committee chairwoman Baroness Prashar said the current refugee crisis was the greatest humanitarian challenge the EU had faced in its lifetime, but member countries were failing to shoulder their "fair share of the burden".
"At the sharp end of this crisis are unaccompanied migrant children, who are being failed across the board," she said.
"We found that these children face suspicion on arrival. They are seen as 'somebody else's problem', and the conditions they live in were described to us as deplorable and squalid."
Under a scheme announced in May, the government said lone child refugees registered in France, Italy or Greece before 20 March could be resettled in the UK.
Ministers had been under pressure to accept 3,000 unaccompanied child refugees from Europe, but then-Prime Minister David Cameron said numbers would depend on what local councils could cope with.
The Home Office said the new policy - which is underpinned by the Immigration Act 2016 - had made "crystal clear" its commitment to bring vulnerable children from Europe to the UK.
More than 20 children have been accepted for transfer to the UK since the Act was given royal assent and the majority of those have arrived, a Home Office spokeswoman said.
The government is in discussions with the United Nations and the Italian, Greek and French governments "to strengthen and speed up mechanisms to identify, assess and transfer children to the UK and ensure this in their best interests", she added.
Meanwhile, Downing Street has defended Theresa May's decision to scrap the post of Syrian refugees minister - a move criticised by a number of MPs, including Conservative backbencher Heidi Allen.
The prime minister's official spokeswoman said the Home Office would retain responsibility to meet the government's promise to take in 20,000 Syrian refugees by 2020.
Thousands of lone migrant children are living in squalid conditions after being let down by European countries including the UK, a report has warned.