Rising Rents and Lack of Affordable Homes Lead to Thriving Illegal Subletting

Rising rents and lack of affordable homes lead to thriving illegal subletting market, says Let Risks

Oxford Council cautioned last month that tenants who are illegally subletting should give back the keys to their rental properties during a two-month amnesty period, or they will risk prosecution for fraud.

This scheme aims to eliminate tenancy fraud, which is mostly illegal subletting. The campaign warns that illegal subletting is now a criminal offence, and is punishable by imprisonment and a fine.

Rising Rents and Lack of Affordable Homes Lead to Thriving Illegal Subletting

Around 3.3 million people are living in the UK as unauthorised tenants; this affects one in every ten rental properties.¹ Around half of letting agencies have discovered extra residents living in a property, says Direct Line.1

Managing Director of LetRisks, Michael Portman, says: “Although the problem is more prevalent in the social housing sector, it is a risk for private landlords. When there is multiple occupancy in a property, wear and tear and damage is dramatically accelerated; a big problem for landlords and agents.

“Very often, the obvious damage to the property are: iron burns on carpets; cigarette burns; heat damage to polished wooden furniture; scuffs, marks and dents to walls; stiletto heel imprints on wooden floors and vinyl.

“There can also be considerably more mould and condensation with more occupants. Landlords can also face expensive repairs for damage and redecoration costs, to bring the property up to the standard it was at check in.

“Illegal subletting falls under tenant fraud and it’s undoubtedly a growing problem. Renting a property makes landlords vulnerable to fraud. Hence it is vital that landlords and agents carry out thorough pre-letting checks. The purpose of referencing a tenant is threefold: to check the person is who they say they are; that they can afford the rent; and that they have honoured past commitments.

“Information collected on the tenancy application can be used to trace them, should they abscond, or leave owing money. In addition, should the applicant make false statements, this document provides evidence for eviction.

“It is important not to take everything at face value. Don’t believe anything that you are told or what you read in on the application. It is vital that prospective tenants provide employment references and if there is in any doubt, the applicants should be asked to provide further proof, for example, copies of payslips or sight of bank statements.

“Extra precautions, such as asking for three months’ bank statements can help catch out potential fraudulent tenants. Also take the time to compare addresses shown on the application with those shown on the ID documents.

“Ask for previous utility and telephone, including mobile phone, bills and statements, and check if the name and address and other information matches up with the information on the application form.”

LetRisks’ tips for which evidence to look for are:

• Pay regular visits to the property; every three to six months is ideal.
• Look out for signs of other people living in the property, for example, excessive rubbish or extra toothbrushes.
• Carry out thorough checks before taking on a new tenant.1

¹ http://www.landlordtoday.co.uk/news_features/Unauthorised-subletting-“a-major-problem”-facing-landlords-and-agents