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  • LHA/Universal Credit

    "Lockdown" landlords scamming benefits



    A new article in the Guardian suggests that highly organised gangs of rogue landlords are making millions every year out of the housing benefit system by enticing desperate local authorities to place single homeless people in micro-flats in shoddily converted and dangerous former family homes.

    Three-bed houses, where the maximum weekly housing benefit for flat-sharers is under £100 a person, are being converted into as many as six tiny self-contained studios – as little as 10 sq m in size. Each then qualifies for housing benefit of £181 a week, enabling a landlord to squeeze £56,000 a year in rent from a property on London’s fringes, all paid from public funds. The £56,000 compares with the typical £6,200 annual rent on a three-bed council house.

    A previously unpublished government report into a £700,000 project to tackle the scam, released this week under freedom of information laws, shows that councils are struggling to contain the spread of the “lockdown” model, which has taken hold in at least 12 London boroughs since 2015.

    It warns of “well organised but unscrupulous landlords” profiting despite some councils – including Hackney, Bexley and Greenwich – launching prosecutions, raids and prohibition orders.

    Full/source article 

    Earlier this week, the Chief Inspector for Neighbourhoods in the Royal Borough of Greenwich has named HMOs amongst the top priorities for his officers!

    This is what he tweeted:

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    I would imagine very few of us would be surprised at this

    and I would imagine most are not declaring to HMRC

    Its the end of the Market which most of us hate

    The press see this and publish it and we then get the outfall

    This is why the sector is hated and this sort of thing will not help

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    Not sure I understand what is occurring here.

    Are we saying that councils are knowingly participating in criminality by paying LL  HB for illegal lettings??

    That is not my understanding.

    These  LL  are fully compliant with regulations.

    They are just pushing the envelope to the maximum they can achieve.

    If on the other hand the council believes these are illegal dwellings then they should shut them down and they certainly  shouldn't be paying for accommodation  at any of these properties with HB funds.

    So I'm not sure as to the efficacy of this story

    I suspect fake news.

    There is nothing wrong with LL  using the current regulations  to maximise profit even if it does result in very small studio flats.

    The system would seem to allow this so it is only natural that LL  would seek to utilise the system  for their maximum benefit.

    Blame the system  not the LL  for using it.

    It is all very well taking the moral high ground and I'm sure many would see this situation as exploitation

    I don't as nobody is forcing these tenants to occupy these properties

    There are plenty of properties outside London that cost less and have far more space.

    These tenants choose to live in London.

    They must suffer the consequences  of such choices.

    In this case bloody small but apparently legal studio flats!


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    The minority spoil it for the masses and they should be dealt with

    Councils and government though have created a breeding ground for this through their own neglect

    They helped to create a profitable  industry but with little scrutiny and  enforcement structure

    There is a hypocrisy here too

    The enforcers step over the freezing man in the street to do a raid on an unheated house

    Councils are the landlords of our pathways.

    As guardians of our open spaces they contravene health and safety regs every day.

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    Jonathan Clarke. http://www.buytoletmk.com

    Agreed but the bottom line is are these studio flats legal or not?

    If not the council where they know of them should shut them down.

    They certainly  shouldn't  be paying HB to LL of these allegedly illegal properties.

    The legality or otherwise  of these properties needs to be established  otherwise it is just fake news and no LL  is scamming anyone.

    They are just maximising the regulations  for maximum profit.

    Nothing wrong with that as the law potentially allows it.

    If this is considered undesirable then change the bloody law!

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    The legal set up is sometimes grey and subjective and open to different interpretation

    Different councils have different interpretations as do different courts

    I have had disputes with EHO`s on occasions . Their knowledge is often lacking

    They often  lean on you without legitimacy

    They tried to get me to spend 5000 on one house . Legally I only had to spend 50

    Sometimes they  add a moral bookmark

    They compare their own personal domestic living standards to a rented flat

    The two are not always the same though . Sometimes better sometimes worse

    Both can be perfectly legal but one maybe  pretty and the other one is not

    Legality and prettiness often get confused with councils and others

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    Jonathan Clarke. http://www.buytoletmk.com

    Well until councils determine that a LL  is breaking the law then they aren't scamming anyone and this is fake news.

    Exploiting regulations  may not be pretty.

    But that isn't really the point.

    The fake news alleges that LL  are engaged in illegality by taking HB for properties that are allegedly illegal

    It seems they are not illegal and won't be until the council wins a court case which states they are illegal.

    Until that happy day then these LL  maximising the system for their are advantage aren't scamming anyone.

    Emotive and incorrect language as to what a LL  is doing does nobody any good. Rather than the incorrect term of scamming what these LL are doing should have been described differently.

    Such as

    LL  Exploiting current legal  housing regulations are receiving HB at far higher rates than if the rooms were rooms and not designated as studio flats.

    Nothing illegal here and no scamming of anyone

    Fake news in other words.

    Journalists persist in generating such fake news to sell their product.

    If I was a LL Exploiting regulations  to the maximum I would not look upon things lightly if I was accused of scamming anyone.

    That is libel  though I doubt any LL  would wish to launch a libel case!

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    I think we are missing very valid point here, dividing a house into flats or studio are subject to planning laws and if council allows that to happen then why blame LL.

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    It's the Guardian so of course it's anti-LL!

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    I'm afraid you're all missing the point here. The Lockdown HMOs are a specific category of abuse where the absolute minimal space is created from what are already only 2.5 bedroom terraced homes. These results in an average floorspace of c.12.5 square metres and contain a shower/toilet unit the size of a small wardrobe. They units are then advertised as 'self-contained studios with kitchen(ette)' on places like Gumtree for £0 "we will help you with your benefits claim". Charities like St Mungo's are then approached to tenant these places with homeless or near homeless tenants and only those over 35 and eligible for Universal Credit need apply. This is in order to maximise the amount of LHA payable to the unscrupulous Landlord who fills out the paperwork as though the property were SELF-CONTAINED! Yet the property is, properly conceived, SHARED accomodation - a HMO after all. In this way the landlord defrauds the tax-payer out of Local Housing Allowance. They have also misrepresented the property as having its own kictche(ette) which it cannot as that would mean it would form its own planning unit and require PP. there's a lot going on with this scam but the reasons the Local Authorities are afraid of doing anything about it is there are now over 500 such properties all operated by a cartel of Stamford Hill landlords who have vaguely threatened to turn out all of the tenants if their business model is taken away from them. For more on this and my two-years fight to expose this exploitation please see https://www.hanworth.org. Definitely NOT fake news!

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    Well if it isn't fake news then about time the council enforced existing housing regulations! !!

    No council should be permitted not to prosecute because they are scared of the likely outcome with more homeless.

    I'm sure if the Council advised these LL that unless they changed the layout of these properties that they would start to prosecute then these LL would comply.

    Give each LL 6 months to become compliant

    Then prosecute if the LL have not complied with Council requirements.

    Councils need to play hardball with LL who push the envelope too far.

    You state it is not fake news

    There still appears to be doubts that what these LL are doing is breaching regulations.

    The Council needs a test case.

    If they win then this will change LL behaviour.Good LL really wish councils would use their existing powers to enforce PRS standards.

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