Problems with exempt accommodation are spreading from Birmingham to other UK cities, an MP has said.
A “wild west” of the housing sector needs reform to stop landlords exploiting vulnerable people, ministers have been warned.
Senior Conservative MP Bob Blackman has proposed a law change to tighten up regulation of shared accommodation aimed at prison leavers, women who have fled domestic abuse, recovering addicts and others.
Supported exempt accommodation is supposed to give vulnerable people with nowhere else to go a place to live where they also receive visits from carers.
But Mr Blackman said a growing number of “unscrupulous” landlords are offering their properties up as exempt accommodation, leaving people without adequate care and transforming whole neighbourhoods into “ghettos” of substandard shared homes.
Charities have previously warned a growing number of accommodation providers are attempting to “exploit” vulnerable residents for their housing benefits cash.
There is currently no regulation of supported exempt accommodation, and the Harrow East MP has tabled the Supported Housing (Regulatory Oversight) Bill in order to create oversight of the sector.
He told the PA news agency: “Up and down the country, but particularly at the moment in Birmingham… we have a position where there’s what I would describe as a wild west show.”
The MP recently joined a cross-party committee field trip to the city to see problems with the sector first hand and is concerned about “the conditions in which people are then forced to live”.
He added: “We have a have a problem here, in the sense that you could have, if you’ve got an unscrupulous provider, you could have a position whereby you have someone who has left prison who is an ex-offender, you can have a woman fleeing domestic violence, you can have someone who’s a recovering drug addict, someone who’s a recovering gambling addict, someone who’s recovering from other addictions, or other problems, all in the same household, without any checks or balances at all.
“Obviously, that places those vulnerable people in an even more vulnerable position overall.”
Mr Blackman said tenants in some shared homes claimed the support they were supposed to receive from carers amounted to “sending someone around once a week” to merely check on them, adding people were “actually not getting any help to rebuild their lives in any way, shape or form”.
He added there was a “perverse incentive” for accommodation providers to keep people on housing benefit rather than helping them to “rebuild their lives”, as this would end the rental income provided by their housing benefit.
He warned: “What is happening in places in Birmingham now is that you literally see every house in the street being taken over by unscrupulous landlords who step in, buy the properties, extend them… then turn them into exempt accommodation, and suddenly, you’ve got a ghetto of people who are in this unfortunate position.”
MPs debated solutions to growing problems with exempt accommodation in Birmingham in February, but Mr Blackman said there had been “numerous examples” of similar situations across the UK since then, including in London.
He added: “Obviously, property prices in London are very much higher than elsewhere, which then means that there’s even more pressure on the landlords, if they acquire properties in London, to exploit them even more.”
Mr Blackman said he favoured giving local councils new “light touch” powers to regulate supported exempt accommodation but added that they would “require some resources” to oversee it.
The accommodation is described as exempt because it is not subject to the housing benefit cap.
In a report published last year, national homelessness charity Crisis said that the “exempt provisions of housing benefit allow landlords to receive higher rents than is the norm for social or even privately rented housing”.
It added: “While there are legitimate reasons for this – managing supported homes is more costly than managing mainstream housing – we are seeing unscrupulous agencies exploit gaps in the regulatory regime to claim higher benefit levels while providing minimal levels of support.”
The charity estimates there has been a 62% growth in the amount of exempt accommodation across the UK since 2016, with 95,000 cases recorded in May of that year rising to “in the region of 153,000” in 2021.
Mr Blackman’s Bill is due to be considered by MPs for a second reading on November 18 but is unlikely to become law without Government support.
A Government spokesperson said: “While there are many excellent supported housing providers, we know there are a minority that are shamelessly taking advantage of vulnerable people, and we are taking urgent action to end this practice.
“We recently announced new laws to crack down on rogue landlords, protect residents and give councils stronger powers to intervene.
“This is backed by £20 million investment to support councils to drive up the standard of supported housing.”