A resident has raised concerns about a neighbouring tenant reportedly renting out a property acquired through the government’s Help to Buy equity loan scheme, which officially ran from 2013 to 2023. The programme was designed to assist first-time buyers in purchasing new-build properties, offering significant financial aid through loans up to 20% of a property’s value, or 40% in Greater London. However, the scheme's terms explicitly prohibit renting out the purchased properties unless under exceptional circumstances.
The individual, who lives in close proximity to the neighbour's flat, has observed that the flat, intended solely for residential use by the owner, is now occupied by five tenants, primarily construction workers associated with the HS2 rail project. This situation has led to congestion in the communal car park, as each tenant has their own vehicle.
Concerned about the apparent breach of the Help to Buy scheme regulations, the resident contacted Homes England, which administers the scheme, as well as local council authorities, to report the illegal subletting. However, the responses received have not provided adequate reassurance or resolution, leading the resident to seek further advice on possible avenues for escalating the complaint.
Jane Denton from This is Money noted that the Help to Buy equity loan scheme had facilitated the purchase of 387,195 properties during its operational years. "By subletting the flat in the manner you describe, he is in breach of those terms," Denton stated, outlining that living away from the property is only permissible under specific circumstances that require prior permission.
Legal experts have echoed this sentiment, with Olivia Egdell-Page, a partner at Joseph A. Jones & Co, emphasising that owning a Help to Buy property mandates it to be the borrower's sole residence. "Help to Buy was not intended to offer assistance to landlords," she remarked, highlighting that any fraudulent activity might result in criminal prosecution and immediate repayment of funds.
Furthermore, Manjinder Kaur Atwal, director of housing law at Duncan Lewis Solicitors, warned that unlawful subletting could lead to serious consequences for the neighbour, including potential repayment of the equity loan and the possibility of criminal prosecution for misuse of public funds. Atwal advised that the resident might consider submitting a formal request to Homes England to log their complaints, as documentation can often prompt more proactive investigations.
The community's frustration is further exacerbated by the implications of the flat being classified as a house in multiple occupation (HMO), which imposes additional regulatory requirements and protections for tenants. Depending on local legislation, this could necessitate specific licensing from the local council, a potential area of concern for the resident given the current occupancy.
In light of the ongoing issues, the resident was encouraged to follow up with various authorities, such as the housing department of the local council and potentially Trading Standards, to ensure that the matter is addressed satisfactorily. Practicing persistence in formal communication can enhance the chances of a resolution, providing a clearer record of ongoing issues associated with the illegal rental situation.
Source: Noah Wire Services