Increasing numbers of landlords are profiting from letting bad housing to some of society’s most vulnerable people, the National Audit Office has found.
Gaps in regulation are allowing property owners “to profit by providing costly, sub-standard” supported housing “with little or no support, supervision or care”, the spending watchdog said.
There are an estimated 650,000 supported homes in Great Britain with sheltered accommodation for elderly people providing a measure of human help, accounting for the majority. Supported accommodation is also supposed to provide supervision and care for recovering drug addicts, former prisoners, homeless people and victims of domestic abuse. But MPs have said it is proving attractive to some “unscrupulous” landlords as it is exempt from normal limits on housing benefit payments, which allows high rents.
Landlords are engaged in an exploitative “gold rush” as part of a £3.5bn-a-year system that is “a complete mess”, the Commons select committee on levelling up, housing and communities said last year.
The Guardian has previously reported that police believe criminals are buying properties and setting them up as supported accommodation but provide little to no support. Gangs can earn hundreds of thousands of pounds a month, West Midlands police have said.
The NAO report says “some areas, such as Birmingham, have seen increasing numbers of landlords who circumvent the regulations, enabling them to profit by providing costly sub-standard housing with little or no support, supervision or care”.
It said Hull city council found that in the 345 supported housing units it inspected between April 2019 and January 2022, there were 323 hazards classed as a serious and immediate health and safety risk.
Between April 2019 and September 2021, Birmingham city council recovered £3.6m in fraudulent overpayments to supported housing landlords.
Meg Hillier, the chair of the commons public accounts committee, is calling on the government to support councils to solve the problem caused by gaps in regulation, which come “at great expense to the taxpayer”.
“Vulnerable people deserve to live in housing that meets their needs,” she said.
No single organisation is fully responsible for overseeing supported housing. Local authorities can inspect properties and challenge the housing costs claimed but may lack the resources for this oversight. Not all providers are required to register with the Regulator of Social Housing. The Charity Commission regulates providers that are set up as charities, but it does not inspect the housing. Meanwhile, the Care Quality Commission focuses on personal care and does not inspect the quality of the accommodation.
The Department for Levelling Up, Housing and Communities is aware of the problem, the NAO said. It provided £5.4m to local authorities in Birmingham, Blackburn with Darwen, Blackpool, Bristol and Hull to test enforcement measures to improve quality and value for money in supported housing. Last year a minister announced plans intended to deal with “a minority of landlords who charge high rents for poor quality accommodation with little or no support”.
A government spokesperson said: “We are investing £20m over the next two years to improve the quality of supported housing and better protect the most vulnerable people in society. The supported housing (regulatory oversight) bill will raise standards in supported accommodation and stop rogue landlords from exploiting the system. We have also commissioned research to provide an up-to-date understanding of the supported housing sector.”
