Sub-letting offence to stop council home 'cheats'
Wednesday, 11 January 2012 11:07 AM
A new criminal offence of tenancy fraud is being proposed to help stop an estimated 160,000 tenants sub-letting their council homes.
Housing minister Grant Shapps pointed to tenancy "cheats" who "take advantage" of a support system for the most vulnerable in society.
He said that those cheating the system are able to make thousands by letting out their council homes at market rents, which is not currently illegal.
"It's time for these swindlers to pay the price. It would cost us billions of pounds to replace the huge number of unlawfully occupied social homes across the country", he added.
The maximum fine for the new offence could be as high as £50,000.
Shapps continued: "The proposals I've announced today would not only deliver justice to these fraudsters but will also act as a deterrent to those who think they can earn a fast buck from this precious resource.
"I want everyone to know that our country's social homes are going to those in genuine need, not providing a 'nice little earner' to someone who could afford to live elsewhere."
Officials estimate that tenant sub-letting of council homes costs the taxpayer £5bn a year.
About 1.8 million families are on the waiting list for social housing in England and Wales.
Paul Shamplina, founder of Landlord Action, called the move by the government an "extremely positive step".
"There is a severe shortage of social housing in this country but if enforcement is carried out as a result of this law change, then hopefully this will go some way to freeing up council properties for those who are truly in need. Of course, councils being made aware of such cases and having the ability to throw resources at the investigation process in order to enforce this law will be key to combating the issue," he added.
This latest consultation follows on from a government commitment to make tenants earning over £100,000 per year pay market rates.
This would stop situations such as that of union leader Bob Crow, who is reported to earn £145,000 a year, but pays just £150 a week for his three bedroom council home in North London, half the market rate for the area.
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