Tenancy Fraud: What You Need to Know

What is tenancy fraud?

Social housing — homes let by local authorities and housing associations — is a public resource providing affordable accommodation for those who cannot afford to buy or are otherwise vulnerable. Tenancy fraud occurs when a tenant fraudulently sublets, applies for, or seeks to buy social housing in breach of their tenancy agreement or the law. It includes subletting fraud, Right to Buy fraud, succession fraud, housing application fraud, key sale fraud, and corrupt allocation.

The law

There are two key pieces of legislation. The Prevention of Social Housing Fraud Act 2013 makes subletting a social tenancy a specific criminal offence and gives courts the power to make Unlawful Profit Orders — orders requiring repayment of any profit made from unlawful subletting. The maximum penalty is two years’ imprisonment in the Crown Court and six months in the Magistrates Court. The Fraud Act 2006 was used to prosecute tenancy fraud cases before the 2013 Act and can still be used today, as the later Act is not retrospective.

Types of tenancy fraud

Subletting fraud is the most commonly prosecuted form. It occurs when a tenant lets out their property — in whole or in part — without the landlord’s permission. Private sector rents are many times the social housing median of around £113 per week, so profits from unlawful subletting can run into tens of thousands of pounds, and in some cases exceed £100,000 where the fraud continues undetected for years.

Subletting fraud is not always about profit. A tenant who moves in with a partner, takes a job elsewhere, or simply no longer needs the property may pass it on to a friend or relative without realising this is an offence — even if no rent is charged. Advertising the property on Airbnb or in a local newsagent while living elsewhere is equally an offence.

Right to Buy fraud arises where a tenant applies to purchase their council property at a discount under the Right to Buy scheme without occupying it as their main and principal home. The discounts available are large and the offence is treated very seriously by the courts, often resulting in a custodial sentence. Some councils now investigate occupation as a routine step before processing any Right to Buy application.

Succession fraud occurs when a relative applies to succeed to a tenancy on the death of a tenant without having lived at the property for the required minimum of one year. Providing false information or documents in a succession application is fraud.

Housing application fraud involves supplying false details when applying for social housing in order to obtain a tenancy that would not otherwise have been awarded.

How landlords detect tenancy fraud

Social landlords have access to a wide range of investigation tools. In London, most councils and housing associations are members of the London Fraud Hub, which allows them to cross-reference data on council tax, parking permits, single person discounts, and death records. Large credits on a rent account and non-payment of council tax are also red flags.

Councils can obtain access to bank records, where regular incoming rental payments are easily identifiable. They can also track where the account holder’s card is being used day to day — a tenant registered in Hackney who is spending daily in Surrey or Hampshire is unlikely still to be occupying their property.

Online platforms including Airbnb and Gumtree are actively monitored. Once a potential listing is found, fraud teams can use the booking process to establish the full address, a complete rental history, and the tenant’s bank account details.

Penalties and outcomes

Where tenancy fraud is proven, courts have significant powers:

  • Imprisonment of up to two years (Crown Court) or six months (Magistrates Court)
  • Unlawful Profit Orders requiring repayment of all profits from the subletting
  • Confiscation orders under the Proceeds of Crime Act 2002
  • Loss of the tenancy and possession of the property

Not every case ends in prosecution. Westminster Council reported that in 2023–24, over 60% of its housing fraud investigations were resolved by the tenant voluntarily surrendering the keys. Councils are often content to recover the property without the cost and uncertainty of court proceedings. However, where cases do proceed, substantial financial orders and custodial sentences are common.

The scale of the problem

Over four million people in England live in social housing. In London alone there are 800,000 social housing tenancies, and it is estimated that 6–7% of those involve some form of tenancy fraud — at least 50,000 properties. Outside London the figure is around 4%. The average cost to a council of each individual tenancy fraud has been estimated at between £42,000 and £66,000. Thousands of Londoners remain in temporary accommodation paid for by councils while waiting for permanent homes that fraud is keeping out of the available stock. Investigations are increasing and are set to continue rising.

Under investigation? Contact us immediately

We have extensive experience in tenancy fraud cases and act for clients at every stage — from the first letter from the council through to trial. If you have been asked to attend an interview under caution it is essential that you take legal advice before you go. The investigators will often have more information than you expect, and you need to know what they know before you say anything.

At Moss & Co we are experts in both criminal law and housing law, which means we can advise on the full picture — including any related benefit fraud allegations. We offer an all-inclusive fixed fee for interview preparation and attendance which covers:

    • Meeting with you at the office
    • Advising on your case and the evidence against you
    • Reading all disclosure documents
    • Attending the housing fraud interview with you

If no further action is taken after the interview, that is the end of the matter. If prosecution appears likely, we can make representations on your behalf and enter negotiations to try to avoid charges being brought. In the many cases we have handled, these negotiations have often been successful. Post-interview work is charged at an hourly rate. View our fees here.

Legal Aid is available subject to means. Call us on 020 8986 8336 or use the contact form to speak to a specialist.

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