The Right People in the Right Homes

In the UK the demand for social and affordable rents is high; housing providers are under pressure to deliver homes for more people and ensure existing tenants are moved into more suitable housing as their needs change. There are, however a minority of tenancies that are held fraudulently across the sector, costing housing organisations and the taxpayer money and withholding existing stock from legitimate residents.

Tenancy fraud is on the out. In 2019 it was estimated that tenancy fraud in the UK cost the taxpayer around £1billion per year. This may seem hefty, however the equivalent 2011 figure was £2billion. Reports in 2019 from The Chartered Institute of Public Finance (CIPFA) show that over the course of a year, fraud fell in local authority homes by 23%. With shifting priorities due to the COVID pandemic however, it remains to be seen whether this trend will continue through 2020 and beyond.

These numbers infer that the actions taken by local authorities and housing associations alongside the impact of housing reform over the last decade, are coming to fruition. So, what changed? The biggest shake-up in social housing regulation, including the introduction of Universal Credit for a start. In addition to this, the Social Housing Fraud Act (2013) made subletting rooms in council homes illegal and that same year the Bedroom Tax was introduced, aiming to eliminate the under occupation of badly needed family homes. Across that decade the digitisation of public services and acceleration of data-led organisations also brought the ability to investigate fraud out from the realm of dusty filing cabinets, helping to connect the dots.

Some alternative approaches are being taken to tackle tenancy fraud. Last year Southampton City Council announced a month-long ‘key amnesty’ for those committing housing fraud to pass back their keys. While this strategy does not recoup arrears, it brings homes back into circulation and may prevent a property falling into costly disrepair if it’s sitting vacant. This type of intervention can be undertaken before a housing provider goes on a dedicated campaign to identify those committing fraud.

The consequences for offenders who are caught rather than voluntarily surrendering the home can have lasting impacts on their lives. One example is a solicitor who unlawfully sublet their home in South London for three years. They were struck off, served a 12-week custodial sentence and were ordered to pay pack to the council in excess of £8,000 for costs and unlawful profits.

Stories like these are often caught up and widely publicised in the media, but the true proportion of housing fraud is representatively small. In 2015 for example, it was estimated that around 1.5-3% of Right to Buy applications submitted to local authorities were fraudulent. Bold headlines capturing the worst offending though, can contribute to the stigmatisation of social housing residents and the unfair tarnishing of the sector.

Despite these low figures, the stakes for uncovering fraud are high. Bristol City Council have estimated that per home recovered, £93,000 is recouped when costs like temporary housing are taken into consideration. Previously we’ve spoken about how housing providers can measure their impact across society by measuring how their work can make savings to the public purse and demonstrate value for money (VfM). One MRI Software customer, Metropolitan Thames Valley Homes (MTVH) have been using the Tenancy Analytics solutions to identify fraudulent tenancies in their homes. Over two years, a saving of just under £1.1 million was made to the public purse.

“Tenancy Analytics has proved invaluable for the Income team. In 24 months the product supported the recovery of 126 homes, which we have been able to reallocate to those most in need.”

Tim Millns, Director of Income & Leasehold Services, Metropolitan Thames Valley Housing

We spoke to Greg Andrews at MRI about why housing providers are investing in fraud prevention and in the MRI Software solution, Tenancy Analytics. “Housing providers are in a situation where demand outreaches supply for social housing properties. There are over 1 million households on official waiting lists for homes and when somebody is illegally subletting, there is a family in need somewhere that isn’t getting the opportunity to live in a home.” Being faced with mounting challenges, Greg expresses “That getting the right people into the right homes is the priority for our customers.”

Within the sector Greg has found that customers are split. There are “those who are really on top of fraud; this may be because their stock is in towns and city centres, and these urban areas are more sensitive to subletting, for example. Those organisations are normally looking to make their processes more efficient.” Andrea O’Callaghan, Head of Business Improvement and Allocations at Swan Housing has observed that the identification of potentially fraudulent activity is one of the benefits of using Tenancy Analytics. Another is the gathering of robust evidence to enable swift solutions in cases of suspected fraud.

“As a registered provider we are unable to prosecute those we find guilty of tenancy fraud, as only local authorities have this power. Legal action would be required, which can be both lengthy and expensive, so our preferred solution is to encourage surrender of the property. As our knowledge increases, the number of cases of the tenant surrendering the tenancy has been growing.”

Andrea O’Callaghan, Head of Business Improvement and Allocations, Swan Housing

The other type of customer that Greg encounters are those that have yet to engage in a proactive campaign to drastically reduce fraud in their homes. Greg recalled that, “in a meeting recently a customer said, ‘we’re sure fraud is happening, but we just don’t know where.’ For some customers this may not be a priority because the resources aren’t there to investigate.” Engaging Tenancy Analytics first and foremost can establish that the people living in each home are who they say they are.

“Where housing associations and local authorities may not have the capacity to investigate where fraud is occurring, technology can help identify instances, such as whether somebody wrongly has a mortgage for another property or has been in receipt of a home by giving false information. Many organisations still receive leads for fraud from residents reporting suspicious behaviour to them or from housing officers going out and investigating proactively.” These door-to-door checks are strategies, which the current COVID environment has put a stop to for now.

Once keys have been returned from homes that have been fraudulently sublet – or otherwise – the next step for a housing provider is to undertake stringent pre-tenancy checks. These ensure that customer information on housing applications is correct and those coming into the home are given the right support in order to build sustainable, successful tenancies, ultimately continuing the consistent downward trend in fraud across the sector.

Removing fraudulent tenancies is the single most effective way of providing homes to those who need them from existing housing stock. Yet, over the past year, tackling fraud has taken a back seat for many housing providers as the COVID pandemic shifted immediate priorities. In Greg’s words, “Staff are so busy dealing with more pressing issues than fraud.” But analytics tools don’t need to prioritise; they continue working underneath an organisation’s day-to-day activities, uncovering potential fraudulent behaviour and alerting to false information without drawing heavily from an organisation’s resources and utilising the wealth of information that they already possess.

For more Information on how MRI’s Tenancy Analytics tool can support with the recovery of homes and revenue, please contact us at MRI today.

On-Demand Webinar

Elevate Your Customer Relationships with MRI Customer Central

This engaging on-demand webinar will help you create connected customer experiences through the transformative capabilities of MRI Customer Central. Discover how MRI Customer Central, our new SaaS, mobile responsive CRM solution will enable you t…

Watch the Webinar

Reinvest in some more great content:

Webinar
horizon cre

Ensure your service charges are fair and transparent, and achieve real customer satisfaction

Find out more

Select your region

45000+

Clients

20.1m

Units

4.2m

Leases

300+

Partners

170+

Countries