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Council Home Sub-Let Fraud Crackdown Plans Considered

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Council tenants who sub-let their homes could be jailed under proposals being considered by the government.

Some of these figures are staggering!!

Up to £20k a year rent from a property they don't even own?

50,000 people 'at it'.....

Whay has nothing been done before?

because government only understands the stick part of carrot and stick.

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http://www.bbc.co.uk/news/uk-14428588

Council tenants who sub-let their homes could be jailed under proposals being considered by the government.

New laws would target an estimated 50,000 people who rent out their council homes while living elsewhere.

Housing Minister Grant Shapps told the Daily Telegraph those abusing the system could have their homes taken from them and face imprisonment.

There is currently no criminal sanction against council home sub-letting, which is believed to cost about £5bn a year.

Under the proposals, properties taken from the sub-letter would be freed up to be rented to those in greatest need on the housing waiting list.

An estimated 1.8 million families are waiting for a council house.

Mr Shapps told the Daily Telegraph: "Social housing is really precious and it's not right that tenancy fraud and abuse locks out some of the most vulnerable families from getting a roof over their heads."

Some people who sub-let are thought to earn as much as £20,000 a year from the arrangement.

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http://www.bbc.co.uk/news/uk-14428588

Council tenants who sub-let their homes could be jailed under proposals being considered by the government.

New laws would target an estimated 50,000 people who rent out their council homes while living elsewhere.

Housing Minister Grant Shapps told the Daily Telegraph those abusing the system could have their homes taken from them and face imprisonment.

There is currently no criminal sanction against council home sub-letting, which is believed to cost about £5bn a year.

Under the proposals, properties taken from the sub-letter would be freed up to be rented to those in greatest need on the housing waiting list.

An estimated 1.8 million families are waiting for a council house.

Mr Shapps told the Daily Telegraph: "Social housing is really precious and it's not right that tenancy fraud and abuse locks out some of the most vulnerable families from getting a roof over their heads."

Some people who sub-let are thought to earn as much as £20,000 a year from the arrangement.

Can't help wondering whether the recent documentary has anything to do with this.

I was so incensed at the time about that bloke (a policeman) with several properties inc. one in France, subletting his flat for far more than he paid in rent, that I emailed my MP. He fwded it to Grant Schapps, and I got some waffly reply. Should imagine plenty of others did the same. Never actually thought GS would take any commonsense action, though.

Also can't help wondering why the hell it hasn't been made a criminal offence before.

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Having council houses and housing benefit as duplicate benefits causes all the problems. Heavier penalties for abuses is just unnecessary.

Instead, sell off all council homes to the highest bidder. End all housing benefit. Introduce a very progressive land value tax, and introduce a citizens income.

Admin costs for the new regime would be tiny compared to what we have now. All perverse incentives would disappear, and the issue in question would become irrelevant.

Instead the government is proposing to add a new layer of complexity and cost? Will they ever learn?

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Laws are nothing without enforcement - and this won't be enforced.

This is rife in east London. Virtually all of my missus' ex-workmates were doing it. Basically, apply for council flat while still living with parents. Sub let it for a profit, move back in with parents. When you have a number of kids in the family doing that - it all adds up to tidy sum and has been going on for years.

Edited by StainlessSteelCat

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Laws are nothing without enforcement - and this won't be enforced.

This is rife in east London. Virtually all of my missus' ex-workmates were doing it. Basically, apply for council flat while still living with parents. Sub let it for a profit, move back in with parents. When you have a number of kids in the family doing that - it all adds up to tidy sum and has been going on for years.

Great post. Look under the lid of social housing, and all you see are rotten scams.

ICouncil housing is a national scandal. All of the free money you describe comes from taxpayers pockets. And yet no one in power will tell the truth, our nation seems to believe that council housing is fair and helps the poor. It does no such thing, it creates perverse incentives that impoverish us all. New laws can't help, it will at best allow the rip offs to continue with an extra veneer of credibity obscuring the rotten theft of taxpayers money. Ending council housing is the only solution.

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Great post. Look under the lid of social housing, and all you see are rotten scams.

ICouncil housing is a national scandal. All of the free money you describe comes from taxpayers pockets. And yet no one in power will tell the truth, our nation seems to believe that council housing is fair and helps the poor. It does no such thing, it creates perverse incentives that impoverish us all. New laws can't help, it will at best allow the rip offs to continue with an extra veneer of credibity obscuring the rotten theft of taxpayers money. Ending council housing is the only solution.

Not sure I would go quite so far. There are plenty of decent council tenants and it's an enviable improvement over private renting in most cases. And one I'd like to have had the chance to take advantage for a few years at least(there is little worst than having the real possiblity of being kicked out of your house when your missus is still recovering from cancer hanging over you). The biggest injustices are lack of sufficient access to those who want/need it and no credible alternative in the private sector due to AST.

If everyone who wanted access to decent priced and quality social housing, had it - I reckon most of the scams would disappear overnight. It could (and should be) a nice little earner for the tax payer. A long term (working) council house occupier will probably pay for the cost of their home several times over in rent.

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It was quite a chore proving it when I worked for the council back years ago. Although if you're allowed to point CCTV at someone's front door for a couple of weeks and monitor who goes in and out then it's simple.

Giro drops were good neighbours. Quiet. So most people in tower blocks didn't give a cr*p about them.

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Not sure I would go quite so far. There are plenty of decent council tenants and it's an enviable improvement over private renting in most cases. And one I'd like to have had the chance to take advantage for a few years at least(there is little worst than having the real possiblity of being kicked out of your house when your missus is still recovering from cancer hanging over you). The biggest injustices are lack of sufficient access to those who want/need it and no credible alternative in the private sector due to AST.

If everyone who wanted access to decent priced and quality social housing, had it - I reckon most of the scams would disappear overnight. It could (and should be) a nice little earner for the tax payer. A long term (working) council house occupier will probably pay for the cost of their home several times over in rent.

Sure, it would be great if we could all have nice subsidised housing from the state, but that will never work, how do you allocate it fairly? I think it only fair that I get first choice.

As for the scams disappearing, they wont. As long as you have a taxpayer subsidy for something on such a large scale, there will be scams. Indeed, even if you have a long term tenant, like Frank Dobson, there is still a taxpayer scam there. He is paying well below the market rate for his council tax. And it should be the council tax payers who receive the profit from the venture of building his flat in the first place, whereas at the moment Frank Dobson gets all the profit in lower rents than most people pay on properties worth a fifth as much.

In the market you get what you deserve. State intervention robs hard working people, gives others housing they scarcely deserve, and makes us all poorer generally. See that previous post about rampant sub-letting in London, and in case you dont know who is being robbed to pay for that, you are. (and me).

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An estimated 1.8 million families are waiting for a council house.

Some people who sub-let are thought to earn as much as £20,000 a year from the arrangement.

Why do I think this move has nothing to do with helping the people in the first line, just the elites that Shapps gimps for wanting that £20k for themselves?

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Rather than an aggressive approach to the situation, I wonder if (in London at any rate ) if a "nudge" approach could ease things over time. By this, I mean those in need who qualify for social housing, get their subsidized housing as they do now. However, after 2 or 3 years, this rent would be increased by say 5% above the normal inflationary rises - and this rise would not be met from housing benefit. There would be an option to move to other parts of the country where there isn't such a demand for housing, if the tenants genuinely couldn't get work eg they were disabled or over 50 (how many companies set on workers over 50? The exception of B&Q part-timers tends to prove the rule). I'd keep the rent stable for pensioners.

This would mean that over the years the rents would increase to market levels, and beyond. The tenants would then have the option of renting privately or buying, assuming they were working, thus free-ing up the social housing. If they stayed in the property, the council would gain from the market rents. And if they couldn't work, they could move to a lower-cost part of the country (even the coast, which would appeal to many), again free-ing up the social housing in the London hot spot.

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Rather than an aggressive approach to the situation, I wonder if (in London at any rate ) if a "nudge" approach could ease things over time. By this, I mean those in need who qualify for social housing, get their subsidized housing as they do now. However, after 2 or 3 years, this rent would be increased by say 5% above the normal inflationary rises - and this rise would not be met from housing benefit. There would be an option to move to other parts of the country where there isn't such a demand for housing, if the tenants genuinely couldn't get work eg they were disabled or over 50 (how many companies set on workers over 50? The exception of B&Q part-timers tends to prove the rule). I'd keep the rent stable for pensioners.

This would mean that over the years the rents would increase to market levels, and beyond. The tenants would then have the option of renting privately or buying, assuming they were working, thus free-ing up the social housing. If they stayed in the property, the council would gain from the market rents. And if they couldn't work, they could move to a lower-cost part of the country (even the coast, which would appeal to many), again free-ing up the social housing in the London hot spot.

The problem is that house prices and private rents are too high thus making council housing more attractive. You want to raise council rents which would then feed into private rents and make more expensive? Fuelling BTL.

They should reduce and cap private sector rents then council houses wouldn't be as attractive and this would dampen BTL, house prices would fall and then there would be more people able to buy and so the need for council housing would diminish.

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The problem is that house prices and private rents are too high thus making council housing more attractive. You want to raise council rents which would then feed into private rents and make more expensive? Fuelling BTL.

They should reduce and cap private sector rents then council houses wouldn't be as attractive and this would dampen BTL, house prices would fall and then there would be more people able to buy and so the need for council housing would diminish.

You may be right, but the politicians are never going to introduce rent caps. Not in their self-interest (nor their rentier friends). Besides which people seeking accommodation in London would probably be prepared to pay black to get the tenancy, if a rental cap was introduced. Similar to the ways people secretly pay bribes now, to swap their rental flat elsewhere, for a place in London.

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The problem is that house prices and private rents are too high thus making council housing more attractive. You want to raise council rents which would then feed into private rents and make more expensive? Fuelling BTL.

They should reduce and cap private sector rents then council houses wouldn't be as attractive and this would dampen BTL, house prices would fall and then there would be more people able to buy and so the need for council housing would diminish.

Rent caps, sounds like Mugabe style price controls. When did that ever work?

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Sure, it would be great if we could all have nice subsidised housing from the state, but that will never work, how do you allocate it fairly? I think it only fair that I get first choice.

As for the scams disappearing, they wont. As long as you have a taxpayer subsidy for something on such a large scale, there will be scams. Indeed, even if you have a long term tenant, like Frank Dobson, there is still a taxpayer scam there. He is paying well below the market rate for his council tax. And it should be the council tax payers who receive the profit from the venture of building his flat in the first place, whereas at the moment Frank Dobson gets all the profit in lower rents than most people pay on properties worth a fifth as much.

In the market you get what you deserve. State intervention robs hard working people, gives others housing they scarcely deserve, and makes us all poorer generally. See that previous post about rampant sub-letting in London, and in case you dont know who is being robbed to pay for that, you are. (and me).

Troll and perverse scumbag on this subject!

Social tennants do not get subsidies - the Govt makes Billions of pounds excess profit out of their rent payments per year which are diverted from building more housing & used to subsidise tax breaks for the rich.

Council houses/flats were paid off decades ago!

We never had a problem before Thatcher removed rent contols and smashed all common sense tenancy laws that had been in place for decades (1920's) when landlords were last taking the piss out of people renting private housing.

She truly was - the bitch from hell as we all now suffer greatly from her legacies.

Edited by erranta

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Rent caps, sounds like Mugabe style price controls. When did that ever work?

If people cannot afford to live anywhere except in council houses demand for them will increase. Making them cost more will not solve the underlying problem. We need to make other places to live cheaper, then demand for council houses would drop.

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If people cannot afford to live anywhere except in council houses demand for them will increase. Making them cost more will not solve the underlying problem. We need to make other places to live cheaper, then demand for council houses would drop.

Using a price fix to fix a price fix (planning restriction and to a lesser extent HB) is the economics of lunacy, its the sort of ass about face economic logic Brown would be proud of and why there are about two trillion taxes and benefits in the uk, each one used to offset the other rather than sort out the original problem

Edited by Mary Cassatt

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Using a price fix to fix a price fix (planning restriction and to a lesser extent HB) is the economics of lunacy, its the sort of ass about face economic logic Brown would be proud of

It is a tremendous honour to held in the same esteem as someone who saved the world.

Though I must confess my VI status.I am renting and this week is the yearly anniversary. I want the rent to drop or at worst stay the same :P

Anyway how is your 15% sterling doing? What will the S&P rating do to it?

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It is a tremendous honour to held in the same esteem as someone who saved the world.

Though I must confess my VI status.I am renting and this week is the yearly anniversary. I want the rent to drop or at worst stay the same :P

Anyway how is your 15% sterling doing? What will the S&P rating do to it?

Almost as well as the 40% in dollars, the only excuse is that wefundamentally interested in what they are in a couple of years time, 10% here or there is immaterial, the same as the indexes, at this point for us it makes perfect sense to diversify our currency holdings, it gives added security and protection and allows the locking in of substantial gains for house purchase in either country at some point in the future or not. I dont think the rating change makes any real difference, im pretty sure the USD and GBP multiyear bottoms are around here somewhere whatever the rating agencies do or media say or dont say

Edited by Mary Cassatt

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Troll and perverse scumbag on this subject!

Social tennants do not get subsidies - the Govt makes Billions of pounds excess profit out of their rent payments per year which are diverted from building more housing & used to subsidise tax breaks for the rich.

Council houses/flats were paid off decades ago!

We never had a problem before Thatcher removed rent contols and smashed all common sense tenancy laws that had been in place for decades (1920's) when landlords were last taking the piss out of people renting private housing.

She truly was - the bitch from hell as we all now suffer greatly from her legacies.

Erranta,

You are happy to point out, the theft by bankers of taxpayers money. But here we have a theft of taxpayers money, and this time it is ok?

Have you seen the sub-letting that is rife, giving free money to some whilst giving a large bill to others? Council housing once served a purpose, but now it is just a corrupt and broken process that takes from many and gives free money to the few. It exacerbates the housing problems in the country by perverting a huge swathes of the

Market. Those who deserve decent housing cannot get it, the price is too high, others get it subsidised.

It has become a corrupt system of fraud, hiding behind a fig leaf of respectability for the few people who really deserve and need the help it provides. State allocation of resources always ends up with grotesque failures such as this.

Edited by leicestersq

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If people cannot afford to live anywhere except in council houses demand for them will increase. Making them cost more will not solve the underlying problem. We need to make other places to live cheaper, then demand for council houses would drop.

Yes, more supply will cause prices to fall. Allowing markets to operate, including allowing prices to rise, reduces demand to match supply. However some who gain an advantage in the market due to state assistance, have a better choice, and can afford more housing than others due to a false price. To enable this, access to this price must be restricted by some criteria. The cost if it, must also fall on someone else's shoulders. Those who bear the cost get less housing as a result.

That is the unfairness of council housing. Any state allocation of resources always ends up the same way. Force is used to take from some, and given to a select few. The overall result is a second rate allocation if resources.

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Sent them down, and take all the profit of them, Their Crooks. About time.

What about those who aren't sub-letting, but still getting a massive subsidy like Frank Dobson? Is that ok?

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