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Tenancy cheats 'costing councils £900m a year'

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Tenancy cheats 'costing councils £900m a year'


Published by Anonymous for in Housing and also in Central Government, Communities, Local Government

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Housing tenancy fraud is costing councils in England around £900 million a year, according to National Fraud Authority (NFA).

The fraud - which is the use of social housing by someone who is not entitled to occupy that home - includes unlawful subletting, succession fraud and use of false information in a housing application to gain a tenancy.

In 2011, the Audit Commission estimated that at least 50,000 properties are subject to tenancy fraud in England, providing an average cost of £18,000 to house a family or individual in temporary housing per year.

Multiplying this average cost of temporary housing with the number of properties unlawfully occupied (which would otherwise be available for occupation) the NFA estimates that housing tenancy fraud costs local authorities in England around £900 million a year.

The NFA estimates the figure is unchaged from last year's annual fraud indicator.

However, other unofficial estimates suggest tenancy fraud is a lot higher than the 50,000 properties suggested by the Audit Commission.

Information services company Experian believes that nearly 160,000 social homes are being fraudulently sub-let in the UK.

The NFA says it has discussed ways to refresh the estimate, which will be reviewed during 2012.

In January the housing minister Grant Shapps published plans to clampdown on social housing tenants illegally subletting their homes in a bid to free up properties for families on the waiting list.

Under the proposals, tenants could face up to two years in prison and a £50,000 fine if the case goes to the Crown court. Currently those found guilty face no greater penalty than losing their tenancy.

There are nearly four million social housing properties in England, with over half of all social housing in England managed by housing associations.

However, the new prosecution powers would only extend to councils, which already have the power to bring criminal prosecutions for housing benefit.

The Government’s consultation states: “We do not think it would be practicable to give the same power to housing associations without raising questions around their possible reclassification from private sector to public sector bodies, although common law gives them the right to bring private prosecutions in respect of criminal offences.”

The same reason is cited for blocking housing associations using new proposed powers to access data about tenants. Under the plans councils would be able to get improved access to information from banks, building societies and utility companies to help identify tenancy fraud.

The consultation states, however, “a local authority would be able to use any new data access powers to investigate potential fraud in a housing association’s stock.”

Howard Kleinberg, director of fraud specialists HJK’s Investigations, says the main issues holding HJK back when investigating issues representing housing associations “owes much to the clouded position they hold within current legislation” and funding.

He told 24housing: “’Public authority’ status, can be a problem when considering which ‘powers’ may be deployed by an RSL to deal with a suspected serious breach of tenancy, such as subletting.”    

The NFA and Audit Commission have discussed ways to refresh the estimate, which will be reviewed during 2012 through work by the Audit Commission to update its view of the number of unlawfully occupied properties.


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