Councils call on Government to close 'legal loophole' on self-contained flats

The Local Government Association has urged the Government to close a “legal loophole” which allows landlords to convert properties into multiple tiny “units” without planning permission.

The landlords’ strategy – known as the Lockdown model – is to market the properties as self-contained flats and secure the maximum level of housing benefit payments which are paid on behalf of tenants direct to landlords.

The LGA said: “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 Association also called for more prison sentences for the worst landlords, rather than the imposition of fines.

It said use of the Lockdown model was thought to have contributed to the sharp rise in housing benefit paid to private landlords (£9.3bn in 2015, compared to £4.6bn in 2006).

The LGA said landlords were able to convert homes into a maximum of six small self-contained studios with en-suite showers and portable cooking equipment, without planning permission, but warned that the electricity supplied to the different properties was often run on stolen meters or hotwired supplies, creating fire hazards.

The Association said new government regulations coming into force later this year would mean councils could issue the worst landlords with fixed penalty notices of up to £30,000, for offences including failure to comply with improvement and overcrowding notices. Authorities will also be able to apply for new “banning orders”.

However, the LGA warned that the micro-conversion loophole being exploited by rogue landlords was undermining these new powers.

Cllr Judith Blake, LGA Housing spokesperson, said: “No landlord can act outside the law and councils will do everything in their powers to ensure tenants can live in rented properties safe in the knowledge that local authorities are there to protect them.

“However, the reputations of all good landlords are being tarnished by the bad ones and councils are being let down by the current system. Legislation is not keeping pace with the ingenuity of landlords to exploit loopholes which need to be closed as soon as possible.”

Cllr Blake added: “Legislation needs to be more joined up to prevent some landlords taking advantage of people at the sharp end of our housing crisis.....

“Councils won’t hesitate to take irresponsible landlords to court for blatantly failing to comply with housing laws and any tenants who suspect their landlord of criminal behaviour or who have been evicted illegally should contact the housing team at their local council.”