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Rogue landlords allegedly making millions out of housing benefits

Rogue landlords are profiting from the housing benefit system by enticing desperate local authorities to place single homeless people into small flats, including rooms that have been converted into self-contained units, according to a fresh report.

An article in The Guardian this week said that people are being forced to live in tiny self-contained studios – as little as 10 sq m in size – which in turn qualifies them for housing benefit of £181 a week, enabling a landlord to squeeze thousands of pounds a year in rent.

The report exposes the fact that councils are struggling to contain the spread of the ‘lockdown’ model, which has taken hold in at least 12 London boroughs since 2015.

A previously unpublished government report into a £700,000 project to tackle the scam, released this week under freedom of information laws, after housing campaigner, Jon Knowles, appealed to the Information Commissioner, reveals that ‘lockdown landlords’ are exploiting planning loopholes created by the government in 2010.

“Investors typically buy a three-bedroom house and convert it into six rooms, each with basic cooking facilities, in order to claim the maximum housing benefit rate,” says the report, which also states: “The letting model was also being actively promoted as an investment opportunity amongst both existing landlords and, possibly, more widely. This has contributed to the strong growth of conversions using the model,”

It adds: “The basic premise […] was to convert houses into a large number of very small ‘self-contained’ units, each containing basic cooking facilities, but to also have a shared kitchen so as to be able to claim, for planning permission purposes, that the house was a house in multiple occupation and fell within permitted development rules.” 

According to The Guardian, housing inspectors found the micro-flats were often in very poor condition with inadequate fire safety provision and dangerously overloaded electrics and plumbing systems.

The report also said that neighbours complained of anti-social behaviour and feeling unsafe when there were influxes of often single men, with substance abuse and mental health problems.

Despite the obvious need to address this problem, it would appear that councils are reluctant to take a hard line because they fear it could make people homeless: “There were clear concerns about the model becoming too widespread and it was felt that changes did need to be made in order to contain its growth. However, it was accepted that these could not be wholly retrospective otherwise it would create a spike in homelessness.”

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    £181 wk housing benefit? max in my neck of the woods is £92 for a person over 35.

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    Exactly. And this basic HMO model is not only typical and accepted nationwide, but don’t these London boroughs have both Article 4 and HMO licensing to stop poor quality rogues?

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    mostly eugimmegrants and muslims are abusing hb???

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