THOUSANDS of Scottish social homes could be lost to tenancy fraud while authorities lack the powers to properly investigate the problem, an expert has warned.
Paula Craig-Perratt, a corporate fraud investigator at Falkirk Council and executive committee member of the Tenancy Fraud Forum, said Scotland was “miles behind” England and Wales when it comes to identifying fraud and recovering social homes being misused.
Tenancy fraud can include tenants illegally subletting social housing, using properties as short-term lets, abandoning homes while retaining the tenancy or obtaining social housing despite not being eligible for it.
Estimates by the Tenancy Fraud Forum suggest around 3% to 5% of housing stock can be affected by tenancy fraud in parts of the UK.
But the true scale in Scotland is unknown because, unlike elsewhere in the UK, there is no requirement to report how many properties are recovered through tenancy fraud investigations.
She said the lack of data meant Scotland could not establish how much of its social housing stock was being misused at a time when councils are struggling to house people in genuine need.
“We seem to be ignoring the opportunities to meet the housing crisis by making best use of our housing stock,” she said.
“We have stock currently sitting just now empty, or that are being sublet, by people that aren’t homeless, that aren’t in urgent need.
“And we’re just allowing this to happen because we don’t have the powers to effectively meet the demands of it.”
Craig-Perratt said Falkirk Council had investigated a case in which part of one of its social homes was being advertised on Airbnb.
However, she said the council’s ability to investigate and take action was limited by Scotland’s laws.
England and Wales have the Prevention of Social Housing Fraud Act 2013, which makes the unauthorised subletting of certain social housing a criminal offence and gives authorities powers to investigate suspected tenancy fraud.
Scotland has no equivalent legislation.
Craig-Perratt said: “The difficulty that we had in that investigation is that because we don’t have the Prevention of Social Housing Fraud Act here in Scotland, we have no means to be able to command information from Airbnb.
“We can’t access any financial records of the tenant to be able to identify how much money they’ve earned from it.”
She said the tenant removed the Airbnb advert after being interviewed, but the property was later advertised on another platform.
A new pilot could provide the first indication of how many council homes are being advertised as short-term lets, although only one Scottish local authority is taking part.
The National Fraud Initiative pilot has obtained data from Airbnb, Booking.com and Expedia which can be matched against social housing addresses, allowing councils to see if social homes are being advertised online.
Edinburgh is the only Scottish local authority participating in the pilot.
The results have not yet been published, but Craig-Perratt said she would be “shocked” if none of the short-term let addresses matched social housing stock.
She said: “I would be shocked if the results come out of Edinburgh that there are no matches between their social housing stock and the short-term let data.
“I cannot see how that will be possible.”
Craig-Perratt said the difference between Scotland and other parts of the UK extended beyond illegal use as short-term lets.
She pointed to cases involving tenants who do not use their social home as their main residence, including people allegedly subletting properties or retaining them despite living elsewhere.
In one case involving a housing association, she said a tenant had obtained social housing through the homelessness system despite having enough money to purchase other properties, which were then rented out for profit.
Craig-Perratt said: “That shouldn’t be how social housing is used.
“We are in the midst of a housing crisis, and we are unable to meet our statutory requirement in a number of local authorities when it comes to homeless temporary accommodation.”
She said Scottish investigators lacked powers available to counterparts south of the border, while Northern Ireland is also moving towards stronger measures to tackle tenancy fraud.
“We are miles behind England and Wales,” she said.
“We are so far behind when it comes to investigating it and recovering properties.”
Craig-Perratt is calling for stronger legislation and clearer guidance to allow social landlords to investigate suspected fraud and recover properties which are not being used as a tenant’s principal home.
She also wants tenancy fraud to be properly recorded so the scale of the problem can be established.
She said Scotland currently risked focusing entirely on building new homes while overlooking social housing it already has.
“We will be able to build properties, but it will take a significant period of time for us to build enough to meet the demands,” she said.
“But we have stock currently sitting just now empty, or that are being sublet.
“I do think there’s a lot that can be done in terms of just improving our legislation and our guidance when it comes to tenancy fraud.”
A Scottish Government spokesperson said: “There is currently no clear evidence base for pursuing legislative change in Scotland similar to the powers that England and Wales have.
“The Scottish Government has already strengthened legislation to make best use of social housing stock following widespread consultation with social landlords. This included legislating to end the Right to Buy, strengthening the rules on succession, joint tenancies, subletting and assignation.
“The Scottish Government introduced a new legal process called 'streamlined eviction' from 1 May 2019, removing the requirement for the court to consider whether it is reasonable to grant an eviction order in certain cases where there has already been a tenancy related criminal or antisocial behaviour related conviction.”
