ROOF Blog

The government is to offer cash rewards of up to £500 to people who report neighbours they suspect are unlawfully subletting their council home.

Ministers have been told that between 50,000 and 200,000 social rented homes in England are occupied by unauthorised tenants, at a time when waiting lists are full and housing projects have stalled.

They are expected to target 8,000 tenancy cheats in a first wave of investigations this week across 145 local authorities after a trawl of council records by the Audit Commission.

There is a growing crisis as demand for social housing has soared during the recession.

About 1.8m households are on waiting lists in England, while just 60,000 social homes have been built in the past two years.

John Healey, the housing minister, said: ‘We can’t allow cheats to hang on to the tenancies of council houses they don’t need and don’t live in.’

The crackdown will be difficult for subletters, who have no rights or protection if a social home is reclaimed, and who can be evicted in as few as seven days.

The Financial Services Authority (FSA) has called the buy-to-let market ‘unsustainable’, with high incidences of mortgage fraud and arrears a major reason for them to act as regulators.

If buy-to-let remained outside its remit, borrowers who were turned down for residential mortgages – which are already regulated and will be subject to tougher rules under the FSA’s proposals – may try to obtain unregulated buy-to-let loans instead; a process it called ‘gaming’.

The FSA said: ‘Bringing buy-to-let within regulation…would address an identified risk to market sustainability, strengthen oversight arrangements and offer the potential for protecting consumers making investment decisions on property’.

Extending the FSA’s scope to include buy-to-let mortgages would require approval from the Government.

Meanwhile mortgage fraud has topped £97 million in the first six months of the year, research by accountancy firm BDO Stoy Hayward has found. Twenty-one mortgage fraud cases have already been heard this year, and the Financial Services Authority has warned that it is causing instability in the lending market.

A Sunday Times investigations has found that members of the royal family have been granted ‘sweetheart’ property deals worth millions. The Crown Estate, which manages £7.3 billion of land and property owned by the crown, allowed several properties to be sold cheaply to Prince Andrew, who subsequently sold them on at substantial profit, while securing rent-free residences for his two daughters. Crown Estate says it took legal advice for the valuations, but ‘special circumstances’ meant such properties cannot always get the highest market valuation.

Anthony Weaver is trying to start a private prosecution against the home secretary. He has applied for a summons before a district judge alleging she defrauded the public purse of between £116,000 and £200,000 by claiming her main residence was her sister’s London flat. The judge has adjourned the case and recommended that Mr Weaver contact the metropolitan police to see whether they are prepared to investigate.

The level of fines levied against individuals for mortgage fraud so far this year has overtaken the number for the whole of 2008. The Financial Services Authority (FSA) said in the last 18 months it had stepped up pressure against fraudulent brokers who operated during the boom, with fines totalling £302,445 in the first quarter of the 2009, and nine order banning individuals and brokers from the mortgage industry being handed out. The most common form of mortgage fraud is inflating the income of the applicant.

The Department for Work and Pensions will sign an historic arrangement with five other countries to improve cooperation in tackling benefit fraud, which cost the UK £800 million annually. The United States, Australia, New Zealand, Canada and Ireland have joined the UK in the ‘Windsor arrangement’ which aims to prevent, detect earlier and provide deterrence against benefit fraud.

The government is extending a hotline in Spain to dob in expat benefit cheats. It says that each year benefit fraud by Britons living abroad costs the UK taxpayers £63 million, and while official do not know how many people are making illegal claims or where they all live, they believe the majority of them are in Spain. Originally the hotline scheme was set up in Alicante, but will now be extended to cover the Costa del Sol and Canary Islands.

An investigation by the BBC into property registration has lead the boss of Nationwide to call for a major reform into the Land Registry, saying it was needed to prevent an ‘exponential rise in fraud’.  The BBC applied to the Land Registry, claiming to be the owner of an unmortgaged house and asked to change the property’s correspondence address, without being asked for proof of identity. Since 2005 the registry has paid out £36 million in compensation for mistakes and fraud.

Five per cent of social housing properties in inner city areas could be unlawfully sub-let, with some people making more than £12,000 a year from it, an Audit Commission inquiry has found. Local authorities or housing associations can lose up to £75,000 on a property as a result of sub-letting, which counts as an act of fraud.