William Eichler 07 April 2017

'Dangerous rogue landlord benefit scam' costs taxpayer millions

Council chiefs are calling on the Government to close a loophole in the law which enables rogue landlords to carry out a dangerous and costly housing benefit scam.

The legal loophole allows landlords to convert properties into multiple tiny ‘units’. These ‘micro-conversions’ are marketed as self-contained flats, which helps the landlord to secure the maximum level of housing benefit payments.

The Local Government Association (LGA) warned this is a ‘scam’ and described it as an abuse of taxpayers’ money.

Figures show private landlords pocketed £9.3bn in housing benefit in 2015, twice that of £4.6bn in 2006, and it is thought this micro sub-division of properties - called the Lockdown model - has contributed to this sharp rise.

The LGA also said these rogue landlords were housing tenants in poor and often dangerous accommodation.

Landlords can convert homes into a maximum of six small self-contained studios with en-suite showers and portable cooking equipment, without planning permission.

However, the electricity supplied to the different properties is often run on stolen meters or hotwired supplies, creating fire hazards.

Thanks to new Government legislation, councils will be able to issue landlords with fines up to £30,000. They will also be able to apply for ‘banning orders.’

This does not go far enough however, the LGA said. Councils should be able to jail offenders. They should also have streamlined housing and planning powers to stop landlords converting properties into ‘micro flats’ without planning permission.

‘No landlord can act outside the law and councils will do everything in their powers to ensure tenants can live in rented properties safe in the knowledge that local authorities are there to protect them,’ Cllr Judith Blake, LGA housing spokesperson.

‘However, the reputations of all good landlords are being tarnished by the bad ones and councils are being let down by the current system. Legislation is not keeping pace with the ingenuity of landlords to exploit loopholes which need to be closed as soon as possible.’

Skills Pipelines: What local government needs to know image

Skills Pipelines: What local government needs to know

Councils and mayors are to be handed a central role in developing skills pipelines for local industries, as the Government unveils what it calls a ‘fundamental change’ to the education system aimed at tackling youth unemployment. Here's what council leaders and officers need to know.
SIGN UP
For your free daily news bulletin
Highways jobs

Wellbeing, Public Health and Communities Officer

Essex County Council
£30049 - £35351 per annum + Flexible Working, Hybrid Working
This is a fixed term contract or secondment opportunity for up to 19 months.Interviews will be held on Thursday 26th August 2026.The TeamBring your p England, Essex, Chelmsford
Recuriter: Essex County Council

Homelessness Prevention and Solutions Officer (Early Help Team)

London Borough of Richmond upon Thames and London Borough of Wandsworth
£38,976 - £47,229 per annum
Job Title
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Practice Leader

Royal Borough of Greenwich
PO6 - £54,267 to £57,402
You will combine leadership responsibilities providing supervision, guidance and support to colleagues London (Greater)
Recuriter: Royal Borough of Greenwich

Adults Social Worker - Harlow North & South Neighbourhood Team

Essex County Council
£36124 - £51834 per annum + Flexible Working, Hybrid Working
Please note that visa sponsorship is not available for this role. Applicants must have a current, unrestricted right to work in the UK.This advert is England, Essex, Harlow
Recuriter: Essex County Council

Occupational Therapist

Durham County Council
Grade 11 - £40,777 - £45,091 p.a (Post-progression) - Pay award pending.
The successful candidate will become part of a highly motivated and successful Occupational Therapy Service within County Durham. This post is perman Spennymoor
Recuriter: Durham County Council
Linkedin Banner