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Social Housing

Volume 538: debated on Wednesday 11 January 2012

I announced in the Government’s housing strategy my intention to tackle social housing fraud and I am today launching a consultation that sets out my proposals in this area. These proposals would increase the deterrent to tenants considering cheating the system, enable those who do to be detected more easily and punished more severely, and encourage social landlords to take a more proactive approach to tackling tenancy fraud. This would free up valuable social homes that can then be allocated to those in greatest need.

There is a clear case for reform. Social housing is an enormously valuable national asset, providing essential support for millions: yet while there are over 1.8 million households on social housing waiting lists, estimates of the number of social homes in England being unlawfully occupied range from 50,000 to 160,000. The National Fraud Authority estimates that tenancy fraud costs £900 million per year. Replacing these unlawfully occupied social homes—to house those who have effectively been displaced by those who commit tenancy fraud—would cost several billion pounds.

Most forms of tenancy fraud are civil matters rather than criminal offences. This means that while abusing a social tenancy can be extremely lucrative, the consequences for those caught breaking the rules tend to be relatively minor—in most proven cases the legal tenant is simply required to give back the keys to a property in which they do not live. Existing legislation does not allow for a criminal prosecution for sub-letting or most other types of tenancy fraud.

In addition to the lack of an effective deterrent, tenancy fraud investigators argue that they do not have sufficient investigatory powers, meaning that they can only detect a fraction of the homes being unlawfully occupied. Recent Government investment has seen an increase in the number of social homes being recovered, but it is apparent that stronger measures need to be considered.

My proposals would introduce new legislation so that social tenants who abuse their tenancies could be subject to criminal sanctions with a maximum penalty of a £50,000 fine and two years’ imprisonment. They would also allow for any profits made from tenancy fraud to be confiscated, a restitutionary payment to be made to the landlord, and would give local authorities the power to prosecute for matters related to tenancy fraud.

We are also proposing to remove the discretion a court has when it comes to evicting tenants of housing associations who have been proven to have sub-let the whole of their homes. This would bring housing association tenants into line with council tenants. I will also review the “intention to return” defence often used by tenants, which has meant that a tenant can live away from the property for a substantial period of time, sometimes years, and still maintain their tenancy by arguing in court that they intend to return to the home.

These proposals would be in addition to rather than in place of the existing powers social landlords have, and in my view are sensible and practical measures that would rectify the anomalous situation whereby the incentive to cheat the system is so much greater than both the risk of detection and the eventual penalty incurred.