Page last updated at 15:26 GMT, Sunday, 22 March 2009

Illegal landlords sub-letting social housing

By Hannah Barnes
Jonathan Maitland show, BBC Radio 5 Live

Council flats
Experts estimate 5% of social housing properties in inner city areas could be being unlawfully sublet.

John does not think he is doing anything wrong by living in social housing to which he is not entitled.

"The place was going empty. It's not the crime of the century."

John is one of thousands of people living in unlawfully sub-let social housing across the UK.

He saves more than 500 a month by renting a one-bed housing association flat from a friend and insists that he cannot afford to pay market rates.

Just this week the National Housing Federation predicted that the waiting list for social housing would top two million by 2011. Does John not feel guilty?

"On a selfish level, I haven't got anywhere to live either," he said, "And I justify it by that.

"It's not the ideal or the best situation but that's how it is. It's not something I just did and thought, 'Sod people who were in a more desperate situation than me.' But I was in a desperate situation myself."

Market rents

No-one is making a profit from John's arrangement. He just ensures that the rent and council tax are paid each month, while his friend is living abroad with a girlfriend.

He's carried on something of a vendetta against me and has forced me into the position where I have to move
Neil

But not everyone is like John. Many others - from illegal immigrants to wealthy young professionals - are unwittingly renting social housing property, thinking the landlord rightfully owns it.

In these cases the landlords are often making huge amounts of cash from sub-letting their property at market rates.

In some inner city areas people can make more than 12,000 a year from sub-letting - money rarely declared to the Inland Revenue.

The money will sometimes subsidise a more lavish lifestyle, while the person lives elsewhere with a partner or family. In some cases, it is even used to pay off a mortgage on another property.

It is hard to know how extensive a problem this is.

The National Fraud Initiative (NFI) is a data-matching operation that takes place every two years and which can highlight cases where someone appears to have more than one council home. But in 2006 and 2007, it led to only 75 properties being recovered, all of them in England.

Huge impact

But these figures could be just the tip of the iceberg. A Freedom Of Information request to London councils alone showed they had recovered more than 560 properties from illegal tenants in the past year.

The NFI - carried out by the Audit Commission and which also covers Wales and Scotland - cannot highlight cases where someone might be registered to only one council house but is actually living with a friend or relative while renting out the property to make a profit.

And only 49 of the several thousand housing associations in the UK took part in the exercise.

Experts say illegal subletting doesn't seem to be a problem in Wales or Scotland - but say there is evidence of this fraud, albeit it on a smaller scale, going on in south-west England, the Midlands and Northern Ireland.

Unlawful sub-letting can have a huge impact on people living nearby.

Neil looks out of window
Neil is having to move house after blowing the whistle on a neighbour
Neil has been harassed and threatened for years after blowing the whistle on his neighbour who was sub-letting.

The fact came to light only after the unauthorised tenant started behaving anti-socially.

Neil was forced to take time off work and even needed medication from his doctor.

"Things got really ugly," he says. "The tenant made it his express intention to make my life a misery.

"He's carried on something of a vendetta against me and has forced me into the position where I have to move."

He says the council did not take the allegations seriously. "Social housing is not a right, it's a privilege and if you abuse that privilege you really ought to lose it, particularly when it's in such a cynical and blatant way," he argues.

"We're talking about fraud essentially - people stealing from the council, depriving them of resources that they could spend on other people."

And there are plenty of people waiting to be housed. There are more than 70,000 people currently in desperate need. They are being housed in temporary accommodation like bed and breakfasts. More than two-thirds of them are in London.

Investigators

But some local councils are taking the problem seriously.

Southwark, in London, has a dedicated team of housing investigators specially trained to interview suspected tenancy fraudsters and find evidence using various data. Between them they recover more than 100 properties per year, saving hundreds of thousands of pounds.

A housing estate
It is thought 2 million people could be on English housing waiting lists by 2011
The Audit Commission argues that every property recovered from unlawful occupancy saves a local authority or housing association 75,000.

This includes the cost of putting people up in temporary accommodation and money paid in housing benefit. On top of this, there is the expense of building new homes.

Experts estimate that 5% of social housing properties in inner city areas could be being unlawfully sub-let.

With a stock of more than 750,000 in the capital alone, a huge amount of money is at stake.

But Jonathon Toy, who oversees the housing investigation team at Southwark, insists it is important not to think solely in monetary terms.

Families in need

"The actual cost to a family who have been waiting on the housing list for years, looking for somewhere to live, often with pressures on them and their children is immense," he said.

"I don't think we can ever overestimate how important that is. Freeing up local housing for people who are in need is absolutely at the heart of what we're trying to do as a responsible social landlord."


This story will be broadcast on the Jonathan Maitland show on BBC Radio 5 Live on Sunday 22 March 2009 at 1900 GMT. Download the free podcast.

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