A “revelation” which is a part of a Channel 4 Dispatches documentary aired Monday examined how so called “millionaire” private landlords are now the fastest growing provider housing for housing benefit tenants.
The programme heaps more negative publicity on to the private landlord sector, when possibly wildly exaggerated claims are made that £9bn has been lost to “opportunistic” private landlords exploiting a legal loophole in housing benefits.
The investigation claims to have revealed that more than 200 millionaires created through a “legal loophole”, which allows these “opportunistic” landlords and agencies “to fleece” a the taxpayer.
The government has said it will crackdown on the scheme which is being investigated by a group of London borough councils. The programme details are being taken as evidence by homelessness campaigning groups that say action is needed urgently to end the massive waste of taxpayers’ money in the housing benefit budget.
Jonathan Isaby, chief executive of the TaxPayers’ Alliance, has said:
“The housing benefit bill is a huge burden on taxpayers and they will be absolutely furious to learn that they are being fleeced by opportunists.
“This also goes to show that not nearly enough is being done to relax planning and allow more houses to be built, which is the root cause of high prices and big housing benefit bills.”
Using Freedom of Information data from the country’s 60 biggest councils, Dispatches says it has revealed more than 200 landlords and letting agents across the country receiving over £1 million in housing benefit payments over three years.
The scheme, the programme claims, involves converting hundreds of family houses into properties of multiple occupation – HMOs – that comprise of multiple “tiny” single bed-sit units. Each of the units is fitted with a small shower room and basic cooking facilities, which means that the tenants they take on could be eligible for the higher rate of housing benefit. This, they say can often be more than double the rate of a room in a fully-shared property.
What the programme fails to point out is that the units are housing many tenants who would have otherwise been housed at public expense in council housing, were that still available. Council housing departments being under tremendous pressure to reduce numbers of homelessness, it would appear in some instances, are turning a “blind eye” to those unscrupulous landlords willing to “bend the rules” and are offering private landlords and letting agents financial incentives to let their properties out to tenants on housing benefits.
Dr Victoria Cooper, lecturer in Social Policy at the Open University told the Dispatches programme that “approximately 40 per cent” of the housing benefit budget is spent on the private rented sector.
London boroughs in particular say they are concerned including Greenwich, Hackney, Haringey, Lambeth, Lewisham and Southwark and have received special funding from central government to investigate further.
The Association of London Environmental Health Managers, which is co-ordinating the investigation, says that this is just a “small proportion of the total number” across the country in what they describe as a “rapidly expanding business model”.
A Department for Communities and Local Government spokesman has said: “The Government is determined to crack down on rogue landlords or letting agents and the Housing Bill will introduce banning orders, fines and a database for the worst offenders.
Lawyers acting for some of the landlords and agents involved told the Dispatches programme:
“Our companies manage a number of properties in London and across the UK. Each one is subject to the regulation of the appropriate local council, is inspected by them and subjected to independent certification generally.
“We have an excellent working relationship with each council. They said they refute all the allegations and would ‘continue to work with local authorities to provide much needed accommodation.”
Programme exposes “Housing Benefit Millionaires” – https://t.co/rHpX8WoPt9
— LandlordZONE (@LandlordZONE) March 22, 2016