A body representing 370 councils in England and Wales wants the government to close a legal loophole which allows the conversion of houses into multiple tiny ‘units’ which are then let as self-contained flats.
The tactic is reported to have been used by some landlords to secure the maximum level of housing benefit payments which are paid on behalf of tenants direct to landlords.
The Local Government Association claims the loophole abuses legal exemptions and the lack of clarity in environmental health, planning and housing benefit rules to avoid detection, and is resulting in widespread abuse of taxpayers’ money as well as housing tenants in poor and often dangerous accommodation.
The LGA is also calling for more prison sentences for the worst landlords, rather than imposing fines. It says some fines can be as low as £1,000 for serious safety offences and claims these are often offset by profits at the expense of exploited and vulnerable tenants whose lives may be at risk.
The association says private landlords pocketed £9.3 billion in Housing Benefit in 2015, twice that of £4.6 billion in 2006. The micro sub-division of properties - called the Lockdown model - is thought to have contributed to this sharp rise and the loophole which first started in London is now spreading across the country.
Landlords can convert homes into a maximum of six small self-contained studios with en-suite showers and portable cooking equipment, without planning permission, but the LGA says electricity supplied to the different properties is often run on stolen meters or hotwired supplies, creating fire hazards.
Under recently-introduced legislation, councils can issue the worst landlords with fixed penalty notices of up to £30,000 for offences including failure to comply with improvement and overcrowding notices. Councils can also apply banning orders when new government regulations come into force later this year.
But the LGA says the micro-conversion loophole being exploited by rogue landlords is undermining these new powers, and states that councils need streamlined housing and planning powers to stop landlords converting properties into “micro flats” without planning permission to protect tenants.