Mystery of missing £400,000 housing benefit payments

The payments, worth around £400,000, are thought to have gone missing after being paid to London Housing Solutions, which specialises in letting property to benefit claimants.

When traced by Channel 4 News, both the present and former directors of the company admitted the money had gone astray, but neither would accept responsibility for its disappearance.

Local Housing Solutions, which is an offshoot of the same company and until recently shared offices, staff and income with London Housing Solutions, also denied benefiting from the missing payments.

Channel 4 News understands at least 100 landlords are owed rent by London Housing Solutions and tenants we spoke to fear eviction as a result.

Guaranteed rent

The two firms were originally set up by businessman Keith MacGregor, who did not respond directly to Channel 4 News’ request for a response.

London Housing Solutions is currently being put into administration by its present owner, Darren Saunders, a former employee of the company who purchased it in November 2013.

Meanwhile, Local Housing Solutions has continued to prosper from offices the two companies previously shared in Catford, south east London, taking on many of the clients left out of pocket by London Housing Solution’s collapse, while refusing to accept its former partner’s liabilities.

As recently as last year, London and Local Housing Solutions together controlled in excess of 700 properties around London and the south east, earning lucrative five and six-figure payments each month from a number of local authorities.

The companies, known to many under the joint moniker “LHS”, operated as a link between individual landlords and housing benefit tenants. They offered “guaranteed rent” to landlords for periods of between three and five years in exchange for the management of their properties.

However, a Channel 4 News investigation has discovered that around £400,000 in housing benefit paid by local authorities to London Housing Solutions has not been passed on to landlords.

The present owner, Darren Saunders (pictured here) claims he contacted local authorities to halt payments as soon as he took control last November.

“It’s a great big mess,” Mr Saunders said. “I believe by me stepping in I’ve stopped it getting worse. I’ve taken over the company, very quickly seen how bad it is and said to all the councils, please do not pay me this money. Do not pay money into this account.”

Giles Peaker, a partner in the housing and public law team at Anthony Gold Solicitors in south London, said there was “nothing at all” to stop companies disappearing with hundreds of thousands of pounds of housing benefits.

“It’s simple to set up and one of these companies can simply go bust and the money vanishes,” he said. “There’s no way to get that money back without great difficulty.”

‘Left in the lurch’

Landlord Charlie Robinson signed a three-year “guaranteed rent” agreement with London Housing Solutions for his four bed house in Belvedere and has not received rent from the company since July 2013.

However, Channel 4 News understands the company continued to receive housing benefit for Mr Robinson’s property for at least a further seven months.

Bexley Council, which was responsible for paying housing benefit on the property, said it was unaware of any problems with London Housing Solutions until informed by Channel 4 News.

“We trusted this company to take responsibility for this property for three years and to pay us guaranteed rent,” Mr Robinson said. “We’ve held out our side of the bargain and they’ve left us in the lurch.”

‘They’re a nightmare’

Meanwhile, Mr Robinson’s property remains tenanted by a family of 14, whose contract is with London Housing Solutions.

Eileen Wager and Lea Spencer live at the house with their children and grandchildren (see picture top) and say they are unable to contact the company to request essential repairs.

The living area of the property is in darkness, after an electricity failure, and the boiler no longer produces hot water.

Six weeks ago, the family won damages against London Housing Solutions over the property’s condition. London Housing Solutions did not attend court.

Ms Wager said: “If they’re not getting no rent, the owners are going to want their house back,” says Ms Wager. “I’m worried for the little ones. Where am I going to put the little ones? I can’t see them on the streets.”

London Housing Solutions’ difficulties appear to stem from a dispute early last year between Keith MacGregor (pictured here), the man behind both London and Local Housing Solutions, and Andrew Jeffrey, director of London Housing Solutions.

Following the row, Mr Jeffrey and his wife Pierra assumed control of London Housing Solutions while Mr MacGregor turned his attention to Local Housing Solutions.

Where is the money?

Both parties blame one another for the £400,000 of housing benefit which has disappeared. Mrs Jeffrey told Channel 4 News the money was “certainly not with me, nor with my husband”.

Despite repeated attempts to contact him, Keith MacGregor would not communicate directly with Channel 4 News.

An employee forwarded an email purporting to be from Mr MacGregor in which he insisted Local Housing Solutions had not benefited from the disappearance of housing benefit payments.

Lewisham Council, which is understood to be the biggest single client of “LHS” paying around £300,000 a month in housing benefit to the two companies, said: “If property owners are owed money by their agents, then they need to pursue recovery with them.”

If you have been affected by the events described in this article, please email ciaran.jenkins@itn.co.uk.