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Report: Surge in “fraudulent” council home renting in the UK

UK: An investigation by the i newspaper has uncovered evidence that council homes are increasingly being rented out fraudulently as holiday lets.

According to the newspaper, sites such as Airbnb and Booking.com are being used to illegally list social homes, and fraud investigators and local authorities have accused the platforms of not doing enough to block the adverts.

Sub-letting part of one’s home is illegal unless a tenant has been granted written permission by their landlord to do so. If a tenant were to sub-let part of their home without the landlord’s permission, they would be in breach of their tenancy agreement.

Through the i‘s analysis of data from the Tenancy Fraud Forum [TFF], it is claimed that social housing fraud cost around £6.2 billion to taxpayers in 2023, and that the number of social homes being illegally rented out as holiday lets has increased by almost 50,000 listings in the last 11 years. The TFF estimates that each lost home costs taxpayers £42,000 on average over a three-year period.

Alan Bryce, co-founder of the TFF, told the newspaper that the proliferation of short-term rentals in cities such as London was “one of the main drivers” for an upsurge in social housing fraud, while fuelling “homelessness” and “bankruptcy in local government”.

When faced with accusations that it was allowing people to “police themselves” and that it “doesn’t make any verification checks”, Airbnb has previously told councils that it is unable to share personal information due to data protection laws. On the other hand, councils said that it should be permitted in cases of preventing or detecting fraud.

In 2022, The Royal Borough of Kensington and Chelsea [RBKC] was given permission to work with Airbnb to crack down on alleged fraudsters who were illegally sub-letting their properties as short-term lets in the capital. The council required a court order to collaborate with the home-sharing platform as the data-sharing would otherwise have violated GDPR laws in the UK.

As a result, Airbnb was allowed to share payment data on two undisclosed estates in North Kensington where illegal subletting activity was said to be taking place, in order to provide evidence of and tackle social housing fraud, as well as provide more housing options for families in need of the space.

According to the i, Airbnb has since shared information with a second undisclosed local authority under a similar agreement to block council tenancy fraud.

The TFF is now urging the Regulator of Social Housing [RSH] to force housing associations to crack down on tenancy fraud, after similar findings of listings and extravagant rental prices in Tower Hamlets and Milton Keynes.

An Airbnb spokesperson told the newspaper: “Hosting in subsidised or social housing in the UK is illegal and has no place on Airbnb.

“If we are made aware of a listing that may be being sublet illegally, we investigate and take appropriate action, including deactivation. This includes removal of social housing from our platform when brought to our attention by local authorities,” they added.

A Booking.com spokesperson told the same publication: “When accommodation providers sign up to list on Booking.com and agree to our terms and conditions, we ask them to verify that they are operating in full compliance with local laws and are legally permitted to rent out their property on a short-term basis.

“If we are ever made aware that a property on our site may not be operating in compliance with local regulations, we investigate immediately and will remove the property if that is indeed the case.

“At Booking.com, we remain committed to collaborating with the Government and local authorities to help deliver sustainable, measured legislative solutions for short-term-lets in the UK and have long been proponents of the introduction of a registration scheme, which would ultimately give authorities the information they need to regulate the industry effectively, while also ensuring a positive outcome for travellers, homeowners and local economies,” they added.

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