Getting ahead of tenancy fraud

Putting a family into temporary housing can cost upwards of £18,000 a year and dealing with tenancy fraud in social housing costs councils over £900m – dealing with tenancy fraud has never been more essential.

Managing a property portfolio is hard work. Whether you’re a local authority, private or social housing landlord, with a challenging economic climate it can be even tougher to identify good tenants from bad.

Housing supply in the UK continues to be hotly discussed and was a key feature of the November 2017 budget. The Government announced their commitment to addressing the challenge; delivering 300,000 new homes a year, a £1 billion lift of Housing Revenue Account borrowing caps in high-demand areas, £28 million invested in three Housing First pilots to tackle rough sleeping in Manchester, Liverpool and the West Midlands, with many now awaiting the details of the proportion of social housing available and how the issue of affordability will be tackled.

300,000 new homes a year

£28 million invested to tackle rough sleeping

£1 million lift of housing Revenue Account borrowing caps

Waiting lists continue to grow with the supply of social housing not meeting the high demand. Tenancy fraud further compounds this issue.

It was thought that around 50,000 social housing properties, about 1% of the total available, were at risk of fraud, but recent research and data-matching from Synectics Solutions, carried out as part of the National Fraud Initiative (NFI) suggests this figure may be closer to 5%, meaning councils need to act fast to slow the problem whilst additional housing is made available longer-term.

The Government introduced the Prevention of Social Housing Fraud Act 2013 in response to the level of fraud taking place; giving local authorities the power to prosecute those who unlawfully sublet.

It was thought that around 50,000 social housing properties, about 1% of the total available, were at risk of fraud

A common form of tenancy fraud is sub-letting, where the ‘tenant’ illegally rents out a property whilst living elsewhere. Rents are often high and the property is no longer available to those most in need.

However, tenancy fraud is challenging for councils and registered social landlords to detect and deal with. Whilst they might be aware of problem tenants who aren’t paying rent, or who disturb neighbours, it is far more difficult to identify sub-letting as rents are usually paid on time and there are no apparent issues.

6 warning signs of tenancy fraud to look out for:

"To hit this issue head on, regular screening of existing tenancy data and a robust application screening process is needed.”

CASE STUDY: CITY OF LONDON CORPORATION

The City of London Corporation trialled the National Fraud Initiative AppCheck fraud prevention solution to address a growing problem of fraud in social housing applications.

The local authority for the ‘square mile’ in the heart of London, the City of London Corporation’s Housing Department is responsible for allocating social housing it owns and manages across seven different London Boroughs. Exponential growth in the numbers requiring social housing means that ensuring housing stock is only allocated to those with a genuine entitlement is critical.

AppCheck provided an additional layer of intelligence to the verification process, as well as highlighting the immigration issues to the City Corporation of those applying to be housed.

The City Corporation’s Anti-Fraud Investigation Team along with the Housing Allocations Team work together across London to detect, prevent and deter people from seeking to obtain social housing under false pretences. AppCheck was used on a trial basis to see if it could improve their ability to identify those applying, or who have obtained, social housing in this way.

As a web based solution, AppCheck was easy to integrate into current processes, as no IT or systems database deployments were needed. The City Corporation purchased a number of AppCheck credits to perform searches on housing applications that were going through their system at the time.

AppCheck provided an additional layer of intelligence to the verification process, as well as highlighting the immigration issues to the City Corporation of those applying to be housed.

RESULTS

Results were significant from the start. City of London Corporation were able to identify several fraudulent applications that were subsequently cancelled, where dishonest information had been provided in attempts to obtain social housing.

Chris Keesing, Anti-Fraud Manager within the City of London Corporation commented on the AppCheck trial:

“The trial of the AppCheck solution was a great success that proved itself very early on by allowing us to identify fraud that would have otherwise potentially not been detected. Such was the success that we quickly agreed to release funds to purchase sufficient AppCheck search credits to roll out the AppCheck solution as part of the normal verification activities of the team. Since the solution was introduced we have stopped ten properties from being fraudulently obtained as a direct result of the intelligence that AppCheck has provided. The solution has proved itself to be a cost effective and positive assurance tool that helps us to protect the public purse, and stop fraudulent applications at source. Our next steps are to assess how we can deploy AppCheck across other areas within the Authority to help us combat fraud.”

FURTHER INFORMATION

If your organisation would like to find out more please contact:

Public Sector Services Team: Call 0845 3458019 or email helpdesk@nfi.gov.uk

Synectics Solutions: Call 01782 664000 or email info@synectics-solutions.com