Council homes illegally rented on apps like Airbnb costing taxpayers extra £6.2bn

Council homes are increasingly being rented out as holiday lets, fuelling a surge in fraud that is costing taxpayers £6.2bn, i can reveal.

Fraud investigators and local authorities said Airbnb, Booking.com and other popular platforms are doing too little to block illegal adverts of social homes.

The cost of social housing fraud to taxpayers rose to about £6.2bn in 2023, according to i‘s analysis of data from the Tenancy Fraud Forum.

The non-profit organisation estimates that the number of social homes being illegally rented out rose from 100,000 in 2012 to 148,000 in 2023.

Each lost home costs taxpayers an average of £42,000 over three years, the TFF said.

Alan Bryce, the group’s co-founder, said the rise of short-term lets was “one of the main drivers” of an increase in social housing fraud.

He said the largest and most well-known platforms used were Airbnb and Booking.com.

Holiday let listings were 19 per cent higher last year than in 2022, and 15 per cent higher than in 2019, according to data analyst AirDNA.

Mr Bryce said large online platforms were refusing to check the ownership of properties or share data with councils.

“This is a major scandal,” he told i. “I’m amazed that more is not being done around this issue, because this is driving tenancy fraud.

“This is a contributor to the way in which homelessness is on the up and the impact it’s having on bankruptcy in local government.”

Hannah Keilloh, policy and practice officer at the Chartered Institute of Housing, said London boroughs were particularly badly affected.

She told i: “When there’s so much strain on the system – there are so few council properties in the first place, such long waiting lists and so many people in temporary accommodation – it’s particularly problematic.”

Andrew Jeffries, tenancy fraud manager at the Peabody housing association, said Airbnb and Booking.com “allow people to police themselves and don’t make any verification checks”, adding: “They also won’t provide us with any information.”

Airbnb has told councils it is unable to provide information because of data protection laws, while councils argue that the sharing of personal information is allowed for the purposes of preventing and detecting fraud.

Stephanie Toghill, a former housing investigations manager at Kensington and Chelsea Council, told i the council had to spend thousands of pounds getting a court order to force Airbnb to hand over its data in 2022.

The local authority had been particularly concerned about illegal subletting in two prominent apartment blocks in Kensington.

Since then, Airbnb has also shared information with a second local authority under a similar agreement to prevent council tenancy fraud, i understands.

Clive Betts, a Labour MP and chair of the Housing Select Committee, said: “Platforms should be willing to provide information to social landlords who need to check if properties on a particular site are their properties.”

Rob Watt, a fraud investigator at Tower Hamlets Council in east London, said council tenancy fraud on Airbnb is a “major issue, especially around the Spitalfields and Brick Lane areas”.

He said it was especially difficult to prosecute fraudsters making use of short-term letting platforms because of a legal loophole that can let them off the hook if they leave possessions behind in the flat, which shows they intend to return.

In one instance, his team discovered a woman working as a university lecturer had been letting out her council home during the week for around £400 or for weekends at a time for around £300, but she would come back to the property in between lets so the council lost its court case.

Mr Watt said court backlogs have become so big since the pandemic that it can take years to prosecute tenants.

Tower Hamlets Council has recovered nearly 600 properties since 2013, and 38 this year. The council currently has more than 200 active investigations.

Milton Keynes Council discovered social homes being advertised on Airbnb last November as part of an investigation that recovered 18 homes. In one case, they found a property advertised as a holiday let for £500 a week.

In a recent case described by the TFF, a home managed by a housing association in London was being advertised for £4,000 a week on an online platform.

The tenant had been given the property for around two years but had never lived in it.

The TFF has also urged the social housing regulator to force housing associations to crack down on tenancy fraud.

Since they do not foot the bill for temporary accommodation, the organisation said they lack a financial incentive to investigate cases.

An Airbnb spokesperson said: “Hosting in subsidised or social housing in the UK is illegal and has no place on Airbnb.

“If we are made aware of a listing that may be being sublet illegally, we investigate and take appropriate action, including deactivation. This includes removal of social housing from our platform when brought to our attention by local authorities.”

A Booking.com spokesperson said: “When accommodation providers sign up to list on Booking.com and agree to our terms and conditions, we ask them to verify that they are operating in full compliance with local laws and are legally permitted to rent out their property on a short-term basis.

“If we are ever made aware that a property on our site may not be operating in compliance with local regulations, we investigate immediately and will remove the property if that is indeed the case.

“At Booking.com, we remain committed to collaborating with the Government and local authorities to help deliver sustainable, measured legislative solutions for short-term-lets in the UK and have long been proponents of the introduction of a registration scheme, which would ultimately give authorities the information they need to regulate the industry effectively, while also ensuring a positive outcome for travellers, homeowners and local economies.”