A fifth of council tenancies across the UK have been found to hold “indications of fraud” following a number of privately led investigations to tackle the growing problem.
It has been suggested that around 160,000 social housing tenants in London alone have been cheating the system, subletting their properties and making millions of pounds at the taxpayer’s expense. The scams include individuals taking out mortgages or credit at other addresses whilst claiming against the benefits system.
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Housing minister Grant Shapps warned the scale of tenancy fraud may be even larger than expected.
“It is completely unacceptable for housing cheats to get a home they don’t need at massively subsidised rates, only to rent it out at market rates and pocket the difference,” he said.
“Social housing fraud has become big business, ignored for far too long.”
The government’s recent estimate on fraudulent council tenancies has been placed at 1 per cent; suggesting over 50,000 tenants in the UK are committing fraud.
In a bid to tackle the issue, the government committed to spending £19m through local council initiatives to improve the housing system. However, recent evidence under a HJK investigation indicated some councils had not spent a penny on tackling the problem.
Howard Kleinberg, director of HJK Investigations, the housing fraud specialist which carried out the research, said: “If this problem was taken more seriously, it could make a significant dent in the council house waiting list.
“But it will never happen, because of the bureaucracy and the way money gets lost in the chain of officialdom.”
HJK, which works for councils and housing associations, performed the “data-matching” exercise with the 27,000 tenants using legal, publicly-held databases such as credit reference agencies and the Land Registry.
In 2,120 cases, 8 per cent of the total, HJK found “red” indicators of fraud, where the registered tenant had a mortgage, bank account, active credit or utility bills at another residential address, the Telegraph reported.
In 3,180 cases, 12 per cent of the total, 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.
It is estimated that there are 1.8 million households on the waiting list for housing.
