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Tuesday, September 13, 2011

The rise of the illegal landlord

New research from the credit company Experian reports that there are three times as many council tenants subletting than originally thought by the Audit Commission. ( A Government organisation way out on its figures, surely not?)

The Experian figures estimate almost 160,000 council homes are being sublet compared to the 50,000 estimate from the Audit Commission.
The study was based on data from 125,000 properties run by 10 local councils and housing associations examining the number of tenants not currently occupying their tenancy address and found living at another property as well as analysing credit activity from adults found at the tenancy address.

The report said that if those homes were made available to people currently in temporary accommodation, which costs about £18,000 per year per tenant, the taxpayer would save more than £2 billion a year.

Read more in the Telegraph
Read more in the Guardian
Read more in Inside Housing

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Paul Barrett said...

Errr....... .... .is this any surprise; most council accommodation is in sought after city centre areas.
If you are on benefit what a fantastic way to make free money; untaxed etc and then go and rent somewhere a lot nicer.
The way to stop this happening is for credit files to be constantly monitored for that address.
This as there should be no credit application from anybody as the occupant is on benefit, aren't they!?
Until this is carried out as a matter of routine councils will find themselves ripped off by these LHA claimants.

Fleur @ new homes in Essex said...

Agree with Paul this has been a lucrative scam for years. In fact many `landlords' from overseas also see it as an easy scam and make hundreds of thousands of pounds. They will often say they have split up from spouse, spouse gets another flat/accommodation then person moves out and sublets for thousands of pounds. What is the Govt going to do about it? This has obviously been going on for years, some of the councils such as Westminster are putting in fraud teams to tackle this, but there needs to be a clear process on how to stop people even being able to sublet in the first place.

Stuart, Birmingham said...

And I bet the new sub tenants will be claiming benefits off the council, who will not check to see if the property is let to someone else in the first place. Many councils fail their taxpayers abismally through none care or attention to their housing benefits system, allowing many to milk the system for years, until either found out or they move on and try it somewhere else.