The National Fraud Authority estimates
that housing tenancy fraud, including unlawful sub-letting, costs
£900 million a year. This lengthens waiting lists for legitimate
housing applicants. Councils recovered nearly 1,800 homes in 2011,
with a total replacement value of nearly £264 million. But
this is pitiful if anything like 1.6 million social homes prove
to be sublet - see below.
suggest that at least 160,000 social homes are unlawfully sublet
in the UK, but as
many as 160,000 social housing tenants in London alone may be subletting
their properties. In
Westminster a raid on one Paddington housing block revealed
75% of housing benefit claimants were not living in their registered
properties and were illegally subletting them for thousands of pounds
a week. Another raid on the luxury 600-flat Park West development
on Edgware Road found 61% of claimants were subletting their properties.
A study of social housing fraud in Westminster is reported here
- it may be as much as £22m a year in Westminster alone.
Social housing fraud is the wickedest form of welfare fraud. There's
more than the financial dimension: there isn't enough social housing
available, so every detection gives a poor family in temporary accommodation
a better life.
Freeing up sub-let properties would be the cheapest and quickest
way to make more social housing available. There are 8 million council
or housing association homes in England and 1.8 million households
on the waiting list. If 20% of these homes right across the country
did prove to be sublet, that would free up 1.6m homes.
So the scope for good is potentially massive.
Where do these figures come from? It's data matching - still much
underused. A matching of 27,000 tenants found "indications
of fraud" in 5,300 cases. That's almost 20%. Yet the government's
official estimate is that less than 1% 50,000 properties
in the whole country are fraudulent.
- In 2,120 cases (8% of the total) they found "red"
indicators of fraud, where the registered tenant had a mortgage,
bank account, active credit or utility bills at another residential
- In 3,180 cases (12%) they found "amber" indicators
of fraud active credit, bank accounts, Sky TV or utility
bill records held by a person with a different surname at the
tenancy address, but no such activity there by the registered
tenant. (The "amber" figure excludes, as far as possible,
legitimate residents with different surnames, such as live-in
partners and family members from previous relationships. They
excluded such people from its totals by data-matching them with
the registered tenants.)
- There was also a third category of properties where the tenant
could never be contacted by the council or where neighbours or
maintenance men had reported suspicions. If these were included
the figure of suspect tenancies could be nearer 25% in some areas.
report on more than 30 social housing providers showed potential
fraud in 6% of tenancies. But this seems to cover different ground
from the previous study, concentrating on people with multiple social
Stoke-on-Trent alone has recovered 44 properties recently, with
another 19 in process. They identify three main types of social
- Application fraud, where tenants have obtained properties by
lying about their circumstances
- Tenancy succession fraud, where the legal tenant dies or moves
out but friends or relatives keep the house
- Sub-letting, where a tenant rents out the council's property
to rake in personal profits.
Not all of these would be caught by the two studies. So the overall
number might be even higher than 20-25%.
Starting from data matching, Hillingdon
has recovered nearly 40 London properties equating to around
£500,000 in realised revenue for the local authority. Hammersmith
and Fulham has identified potential savings of £654,000
within the first eight months. It is expected to top £1 million