Housing

Rogue landlords are profiting from leaving vulnerable people in horror housing

Exempt accommodation is supposed to offer people who are homeless a safe place to stay but instead it’s a "licence to print money" for rogue landlords, a new report found

exempt accommodation is leaving people at the mercy of rogue landlords

Some of the people staying in exempt accommodation suffered "terrible crimes", MPs found in a year-long investigation. Image: Iz zy / Unsplash

Vulnerable people in supported housing are becoming “victims of terrible crimes” by rogue landlords at the expense of the taxpayer, a new report from MPs has warned.

Exempt accommodation is a type of supported housing used to house people with a range of support needs, including people experiencing homelessness, leaving prison, fleeing domestic abuse and battling addiction.

But the current system in England is a “complete mess”, according to MPs from the Levelling Up, Housing and Communities (LUHC) Committee, who have called for the government to urgently regulate the sector after hearing a series of horror stories.

The committee’s report describes some residents being raped and sexually harassed by rogue landlords under the threat of eviction while others were forced to work on properties without pay.

Taxpayers’ money is being spent on uncapped housing benefit to fund many of the properties but the committee warned that “offers a licence to print money to those who wish to exploit it”.

“While there are many good providers of exempt accommodation, the findings of our inquiry on the state of exempt accommodation are shocking,” said Clive Betts, chair of the Levelling Up, Housing and Communities Committee.

“The current system of exempt accommodation is a complete mess which lets down residents and local communities and which rips off the taxpayer. The government must act now to help councils to tackle this situation and ensure people get the quality housing and support services they need to move on with their lives.”

The committee has urged the government to bring forward a series of urgent reforms for the sector, including the introduction of enforceable national standards and compulsory registration, to help boost the quality of exempt accommodation and support services.

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MPs also called for a crackdown on loopholes in the current system which allow providers to exploit the housing benefit system for profit.

A government spokesperson told The Big Issue: “It is unacceptable that unscrupulous landlords are trying to profit at the expense of vulnerable people and we are bringing forward a package of measures to stop them in their tracks.

“This is backed by a £20million investment to drive up quality in the supported housing sector and protect the most vulnerable in society.”

The committee spent a year investigating the state of exempt accommodation but said it was unable to establish the scale of problems with the sector due to a scarcity of data that “show how successive governments have been caught sleeping”.

Giving evidence to the committee, West Midlands Police (WMP) told MPs that organised crime groups typically invest in property as a front to launder money.

Officers described an explosion of exempt housing providers in Birmingham, with 22,500 beds in January 2022, up from 16,000 in May 2020.

If all beds are occupied, WMP estimated that the cost to the taxpayer amounts to £5m a week which “provides very little in terms of support and in fact is contributing to various forms of harm and abuse”.

The WMP evidence explained how a provider can purchase or lease an address and convert every room into a bedroom, including removing communal spaces.

Officers said a property could be purchased or leased for around £800 a month in deprived areas of the city but then five rooms could be rented out for £1,000 a month paid for by enhanced housing benefit.

Providers were then able to take profits – in this case £4,200 a month – and secure other properties, banking in thousands of pounds of profit in the process.

Many of these properties are in poor condition, MPs found, with conditions that leave vulnerable people “more traumatised than before”.

The committee said it heard of people losing their lives as a result, through drug overdoses or even being murdered by fellow residents.

“The best examples of exempt accommodation highlight quality housing and specialist services, with proactive staff helping to support residents. However, in the worst cases support amounts to little more than a loaf of bread left on the table or a support worker shouting at the bottom of the stairs to check on residents,” added Betts.

“Residents and communities are being failed while unscrupulous providers make excessive profits by capitalising on loopholes in the system. Recently it has been reported in the media that these providers have included organised criminal gangs, who use the system to launder money. This gold-rush is all paid for by taxpayers through housing benefit.

“This must change and it is crucial the government brings forward reform on a range of areas including on standards, regulation and oversight, and on funding to put this right.”

Efforts to crackdown on rogue landlords are currently making their way through parliament.

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A private member’s bill, the Supported Housing Bill, is currently awaiting a second reading in the House of Commons next month.

Tabled by Harrow East MP Bob Blackman, who sits on the LUHC Committee, the legislation aims to tighten up regulation and oversight of the exempt accommodation sector.

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Matt Downie, Crisis chief executive, backed the bill and said the committee’s report exposed some of the “worst examples of exploitation and abuse the charity had ever seen”. 

“From being forced to live in damp, mould infested rooms to being harassed, held at knifepoint by landlords, and in the worst incidents sexually assaulted, our clients have bravely spoken out time and time again about the need for immediate action,” said Downie.

“It’s essential we close the loopholes that are enabling people to profit from hardship and ensure that people are given the help, support and space they need to leave homelessness behind.”

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