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Page last updated at 06:03 GMT, Monday, 25 October 2010 07:03 UK
Housing benefit going to bad landlords

Boarded up house in Newcastle
There are fears public cuts will force people into substandard rentals

Reporter John Sweeney discovers that by one estimate housing benefit money totalling as much as £3.5bn a year is going to private landlords deemed bad or neglectful.

In his analysis, Sweeney says the result is that some of Britain's poor are now living in 21st century slums.

Joshua Dansky could well be Britain's worst slum landlord.

His is a property empire funded largely through public money that he is paid from housing benefit for the poor.

Mr Dansky, who has 140 properties in Newcastle alone, has become wealthy by exploiting Britain's critical shortage of affordable housing.

Perhaps more significant is that he is just one of a number of bad or neglectful landlords who are receiving perhaps as much as £3.5bn a year of public money through housing benefits paid to private landlords who accept poorer tenants.

While the coalition government has announced 150,000 new affordable homes will be build in Britain, cuts to social housing and the difficulty facing first time buyers when it comes to getting mortgages mean that more and more people are being forced to rent privately.

So what happens if the private landlords in question provide a terrible service?

Black mould

William Spires in Newcastle
William Spires Newcastle home has black mould and broken windows

The poor cannot sue and councils say they do not have the money or resources to devote to taking slum landlords out of the system.

Housing minister Grant Shapps said he is against one of the suggestions that has been put forward - a national register of landlords that could effectively strike off the worst landlords, prohibiting them from renting properties.

"I don't think it will solve anything. It would certainly cause a lot of extra bureaucracy," Mr Shapps said of the idea.

Mr Dansky, 31, is the sole director of Dreamport Ltd, whose properties are anything but dream homes.

In Benwell, one of the poorest parts of Newcastle, we met William Spires, 19, in the Dreamport Ltd house he rents. It is, in essence, a 21st century slum.

Black spot mould covers the walls, rain seeps in and windows, broken by vandals months ago, remain unfixed.

"I thought someone would come and do the damp and everything but Joshua hasn't had anyone come out," Mr Spires said.

A local electrician called in by Panorama to inspect the property found the electrics in a truly dangerous state.

We're fed up with money going to landlords who absolutely shouldn't be operating in this sector
Housing minister Grant Shapps

Steve Hamilton described the situation as dangerous, especially the fuse box, where an exposed fuse had no cap: "I cannot leave it like that, it's dangerous. That could literally kill someone. To leave the electrics in that state is criminal."

For the slum that William Spires is living in, the taxpayer is giving Dreamport Ltd £400 a month in housing benefit.

The young tenant has neither the money nor the life experience to take on a wealthy landlord like Mr Dansky.

'Ripped off'

But Newcastle council has stepped forward and taken action. It has placed Mr Dansky's company under a slum landlord exclusion zone around part of Benwell. The plan is known as selective licensing and it means that Mr Dansky cannot let any more properties in the zone.

The Great Housing Rip Off?
Monday, 8.30 BBC One

A council-appointed management company is now running the properties on a day-to-day basis, making improvements paid for out of the housing benefit.

But once fixed up, any remaining benefit money will be paid to Mr Dansky.

In the meantime, he can continue to rent out properties that fall outside the council's exclusion zone.

This, said Julie Rugg, a housing policy expert at York University, demonstrates the weakness of local licensing.

If a local council decides to take action against a rogue landlord, there is nothing to stop them from moving their property business to a new area and continuing to rent to housing benefit recipients.

Peeling window frame
Some of Newcastle's rentals owned by Dreamport are crumbling

A point demonstrated in nearby Sunderland where Jade Palin, 19, does not bother with the hot water tap when she runs a bath for her two-year-old son, Kory. The boiler in the home she rents from Joshua Dansky has not worked since she moved in eight months ago.

Jade, whose boyfriend is fighting in Afghanistan, said her landlord suggested she attempt the boiler repair work herself: "I told him to come and fix the boiler and he told us actually to unscrew the bits and do it myself."

For Jade Palin's damp slum, with no hot water or central heating, the taxpayer pays Mr Dansky's Dreamport Ltd £476 a month through housing benefit.

It is not known how much public money Mr Dansky gets through renting out his substandard properties - effectively these modern slums - to housing benefit recipients. There appears to be no way of keeping track of how much public money flows to his company.

Mr Dansky declined Panorama's request for an interview.

But Stephen Battersby, President of the Chartered Institute of Environmental Health, did put a hard number on the cost of housing benefits being paid to private landlords who are not up to standard.

"Looking at the figures, including housing condition surveys, it would be reasonable to think that about £3.5bn of housing benefit goes to what I would call neglectful landlords," he said.

Housing Minister Grant Shapps said that is a figure that he does not dispute - but one that the government is determined to reduce.

"We think it's abusive for tenants who are being ripped off and living in very poor conditions and we're fed up with money going to landlords who absolutely shouldn't be operating in this sector."

Panorama: The Great Housing Rip-Off?, BBC One, Monday, 25 October at 2030BST then available in the UK on the BBC iPlayer.

Slum landlord hit squad proposed
Wednesday, 3 March 2010, 07:55 GMT |  Scotland
Rogue landlords putting tenants at risk
Wednesday, 29 July 2009, 23:04 GMT |  Business

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