Fraud in UK social housing costs £1bn per year
Across the UK it is estimated that 50,000 housing association and council homes are occupied by someone who shouldn’t live there or have obtained the tenancy fraudulently.
These can fall into several categories:
- Unlawful subletting– where a tenant lets out their council or housing association home without the knowledge or permission of their landlord. They often continue to pay the rent for the property directly to their landlord, but charge the person they are subletting to a much higher rate. It is unlawful and unfair to sublet and to profit from a property which could be given to someone legally entitled to occupy it. The Social Housing Fraud Act 2013 makes it a criminal offence for a tenant to sublet their home. The maximum penalty is a two-year jail sentence and a fine of up to £50,000. The court also has the power to make the tenant pay back any profits made through subletting.
- Obtaining housing by deception– where a person gets a council or housing association home by giving false information in their application, for example not telling the landlord they are renting another council or housing association property or giving false information about who lives with them.
- Wrongly claimed succession– where a tenant dies and someone, who is not entitled to, tries to take over or succeed the tenancy. For example, they might say they lived with the tenant before they died, when in fact they were living elsewhere.
- Key selling– where a tenant is paid to pass on their keys in return for a one-off payment
Social housing is a valuable national asset with over four million social housing properties in England providing homes for many low income households and families. At a time when demand for social housing is outstripping supply it is estimated that up to 50,000 homes may be unlawfully sublet which equates to more than 1 in 100 housing association and council homes across England. With temporary accommodation for homeless families costing Councils’ around £18,000 per family, per year, the public purse is being depleted to the tune of nearly £1 billion per annum.
What can be done about this?
From a practical point of view is it viable to go around all of the Council and Housing Association properties in the whole of the country? Probably not, but better ways of vetting people initially through specific forms of identification being requested, checking bank statements, a visit to a previous address when a new tenancy starts or encouraging other tenants to inform the relevant authority on potential subletting, could yeild dividends.
Sources. Town and Country Housing/Peabody Group and The Audit Commission