Legal Loophole Enables Landlord Housing Scam

A legal loophole is enabling certain rogue landlords to scam housing benefit recipients through sub-standard accommodation.

The Local Government Association (LGA) has called for the government to shut down a housing benefit scam enabled by a legal loophole. It allows landlords to convert properties into multiple ‘units’ which are then let as self-contained flats, securing maximum amounts of housing benefit payments for rogue landlords.

The association quoted industry figures which showed private landlords earned £9.3 billion in Housing Benefit in 2015, twice that of £4.6 billion in 2006. They attribute the sharp rise in part to the ‘lockdown model,’ the name given to the scam. Landlords who opt to partake in this convert homes into a maximum of six small self-contained studios with en-suite showers and portable cooking equipment without the need for planning permission. However, this can lead to sub-standard rooms for benefit recipients.

LGA Housing spokesperson, Councillor Judith Blake, said: ‘No landlord can act outside the law and councils will do everything in their powers to ensure tenants can live in rented properties safe in the knowledge that local authorities are there to protect them. However, the reputations of all good landlords are being tarnished by the bad ones and councils are being let down by the current system. Legislation is not keeping pace with the ingenuity of landlords to exploit loopholes which need to be closed as soon as possible. Legislation needs to be more joined up to prevent some landlords taking advantage of people at the sharp end of our housing crisis. Giving councils powers to be able to build more affordable homes is likely to be more successful at meeting necessary standards than the private rental sector, and help reduce the risk of tenants falling victim to potentially tragic and preventable consequences due to unscrupulous landlords.’