A report to be published later this month concludes that around 90 per cent of all tenancy fraud in council homes goes undetected.

The report entitled 'Shutting the Door on Tenancy Fraud' by Callcredit Information Group claims that nearly three-quarters of all local authorities did not uncover a single case of housing fraud in 2011 – despite the fact that it costs an estimated £1bn a year.

Using data obtained from local authorities via the Freedom of Information Act, along with published data, Callcredit also says that 85% of all UK local authorities have no dedicated tenancy fraud strategy or dedicated fraud team.

The report says that 85% of councils with a fraud strategy or specialist staff have uncovered cases of housing fraud compared with only 19% of cases at other local authorities.

It found the most common type of tenancy fraud is unlawful letting (40%), closely followed by non-occupation of a principal home (38%) with significant regional differences in fraud detection rates, from 88% of authorities in Wales failing to detect any fraud compared to just 18% in London.

Andrew Davis, public sector director at Callcredit, said:’ We know from our research that the UK's social housing waiting list now exceeds 2.3m homes, and that the problem of tenancy fraud is endemic across all areas - it is not just restricted to metropolitan districts.

‘Clearly from the results of our survey it is clear to see that those local authorities that do have a dedicated strategy and fraud investigation teams are beginning to yield results.’

Copies of the report will be available from 14 March and can be obtained by registering on the Callcredit site.