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Development for Social Housing Fraud

Last week we blogged about the proposal that the Housing Minister, Grant Shapps, was to make it illegal for landlords to sublet their homes with punishments such as two years imprisonment and a hefty fine included in the plans. Well this week, there has been a further development on the story, as it seems that it’s not just us here at PropertyQuoteDirect that agree with the proposed plans!

Backing for Plans

Paul Shamplina, of Landlord Action, has said that he is fully behind the plans as he is often called in by landlords in order to evict problem tenants, only to discover that the actual problem is the landlords, rather than the tenants. Furthermore, it is also likely that such landlords would be operating without a landlord insurance quote.

Mr Shamplina has been quoted saying: “This is an extremely positive step in combating long-term abuse of the social housing system. There have been a growing number of tenants acting as landlords by sub-letting their council properties for their own financial gain, and this is to the detriment of thousands of other vulnerable people.”

Paul Shamplina then went on to add: “In the past, we have experienced ‘landlords’ seeking our assistance to evict their tenant, only to find out that the property is not in fact theirs and the ‘tenant’ is not actually aware the property is being illegally sub-let. Hopefully, imprisonment of up to two years as well as a hefty fine will act as a deterrent.”

Further Powers

In addition to these measures, it has also been revealed that local councils will be given more powers to further investigate any particular incidents where such fraudulent behaviour is suspected through an increased amount of access to data from banks and utility companies.

So far it has been the case that councils can request data but organisations can refuse to provide it. However, if these new measures were indeed put in place, then organisations would have to comply with council requests.

If there are any further developments on these proposed plans, we will deliver them here, on this very blog!

Social Housing Abuse to be made a Criminal Offence

A big topic in the news today is the story that tenants who have been subletting their social housing could face up to two years in prison. On the face of it that may seem like quite a harsh penalty, but at the end of the day, that is a form of fraud and it is certainly an abuse of the system. A system that has enabled them to live at a low cost.

Fraud Must be Stopped

Grant Shapps has stated that he wants to make social housing fraud a criminal offence as this would be the only way to deter tenants from cheating the system. He has also spoken about his desire to introduce other proposals in an attempt to make it easier to find those that are indeed subletting their homes in order to then tackle the issue and free up homes for the people that need it most.

It is believed that between 50,000 and 160,000 social homes in England are currently unlawfully occupied. There is therefore quite a lot of scope in that figure, which suggests that this is a very inaccurate prediction simply because the fraudsters have been able to cover up the fact that they are scamming the government by subletting their social houses. The cowboy landlords are also extremely unlikely to bother with any landlord insurance quotes. Furthermore, it is also predicted that these unlawfully occupied homes are costing around £900 million each year.

What We’ve Been Waiting For

Now, what I do find to be quite ridiculous is that such a type of fraud is not even a criminal offence at the moment. Hence why Shapps is so keen on making it a criminal offence! The harshest punishment currently being handed out to those who are cheating the system is to simply hand back the keys for the properties they do not live in. My question is, why has it taken so long, and cost so much money, before a plan has been put in place to tackle such offences?

Well, nevertheless, plans that have been announced today will see social housing tenancy abuse punished by a maximum penalty of two years in prison, and a £50,000 fine if the case goes to Crown Court.