New legislative powers have been recently introduced that will give local councils the power to make banks, building societies, utility and telecommunications companies supply them with data in order to investigate housing fraud, writes Emma Moore, a freelance writer and journalist.
The Prevention of Social Housing Fraud Act aims to tighten the housing system and includes initiatives such as introducing new criminal offences of sub-letting, with a maximum of two years’ imprisonment and an unlimited fine, powers for the courts to give housing providers any profit the tenant has made from sub-letting and the aforementioned rights for councils to delve into suspects’ financial pasts in pursuit of evidence.
This may come as welcome news to housing providers struggling with hard-to-prove cases of sub-letting in properties desperately needed by others, but there are some who see the Act as essentially ineffective and worryingly unclear.
Ongoing housing reform
This tightening of regulations and giving more powers to eviction authorities is part of a decades long campaign to change the social housing system. One notable government initiative was the ‘Right to Acquire’ scheme which, according to the government, “allows most housing association tenants to buy their home at a discount”.
The Money.co.uk website points out that “over 1.5 million people have bought their home under the ‘right to buy’ scheme in the UK”, and the initiative has certainly lifted some families out of reliance on housing providers. However, it has also reduced the amount of available housing as council-owned homes are bought by their tenants. This arguably puts greater pressure on housing providers and has limited the options for those in need of social housing.
The situation is greatly worsened when housing which could be let to those in need is instead sub-let by ‘tenants’ who claim to be living there but are in fact living elsewhere and renting out the property for their own profit. This results in an even greater lack of housing, which may force some desperate people onto the streets. However, there are those who would argue that the latest measures to give housing associations greater legal powers over their tenants demonizes and impinges upon the rights of those in social housing. Others believe that this is a move which will give beleaguered housing associations the powers they need to improve their services as a whole.
The Guardian newspaper has brought up several issues with the new Act which have not as yet been adequately answered by the government. Notably, only local authorities can begin legal proceedings, which raises the question of whether councils will prosecute on behalf of housing providers in order to raise money? This would introduce an undesirable element of profiting from the crimes of the dispossessed into government housing policy.
Furthermore, the status of sub-letters in such cases also appears to be unclear. Those who are aware of their illegal sub-letter status could be considered to be aiding a crime, but often people in such situations are unaware of the true state of affairs.
The Guardian sees the new legislation as mere legislative posturing, reporting that “this amounts to little more than legislation for its own sake”, likening the situation to a shark which must keep moving in order to stay alive. Just as the shark must keep moving, so the government must keep bringing in new legislation or be seen as stagnant. That anything of significance will be achieved, The Guardian said, is unlikely. Nonetheless, the Act is already being utilized.
For example, a woman was recently found guilty of illegally sub-letting her housing association property to a family in East Ham, London, while she lived in Barking and Dagenham and was ordered by the court to pay back her £6,900 profit from sub-letting the property, plus £700 costs. Newham Council, which pursued the case, also had a ‘key amnesty’ before the introduction of the legislation, allowing people sub-letting council properties to return the keys of the properties to the association without fear of reprisal. The council reported that this amnesty saved £1.4 million and saw the return of 26 homes.
A drop in the ocean
However, the fact remains that there is a desperate need for the kind of low-cost, low-rent housing which those who illegally sub-let council properties are providing. Ellis and Company, a property agency based in Newham reported “a growth in population and a shortage of new builds”. This means that landlords have enough demand to charge more or less what they please for a property. Frequently rents are far beyond the reach of many, who are then forced to resort to illegal sub-letting at lower rates.
The irony is, of course, that if they were not sub-letting a council property, the same property could be used to house people in a similar situation, or perhaps even themselves. The problem of rising rents, falling incomes, and an increasing need for low-cost housing is a tricky one, and one unlikely to be solved by a simple crackdown on sub-letting. Perhaps what is needed is more social housing as a whole, which would reduce demand for property and reduce demand for low-cost rents of the type which encourage the greedy to sub-let.
Emma Moore is a freelance writer and journalist.