Fraud Prevention in Right to Buy and Right to Acquire Schemes

Summary

The Right to Buy (RTB) and Right to Acquire (RTA) schemes were introduced to help social housing tenants become homeowners. While RTB primarily applies to local authority tenants, many housing association tenants retain a preserved RTB due to historic stock transfers. More commonly, tenants access homeownership through RTA, which applies to properties built or acquired with social housing grant funding after 1 April 1997.

These schemes offer life-changing opportunities to tenants, but they also expose housing associations to significant fraud risks. Misrepresentation, concealed ownership, undue influence or coercion and fronting arrangements can result in the permanent loss of affordable homes, undermining fairness and damaging trust. For housing associations, fraud prevention must be a core governance priority, not an optional safeguard.

At Tenet, our work with housing providers is grounded in four connected priorities: awareness, prevention, detection and recovery all focused on keeping people, homes, communities and reputations safe.

Spotting the Red Flags Early

While most RTB and RTA applicants are genuine, the schemes rely heavily on self-declared information, making them vulnerable to exploitation if checks are inconsistent or under-resourced. Common fraud types include:

• False tenancy histories – Applicants may exaggerate or fabricate their tenancy duration to meet eligibility criteria.
• Concealed property ownership – Applicants may fail to disclose existing property ownership or beneficial interests. This can result in discounted sales to individuals who already have access to homeownership, diverting resources away from those in genuine need.
• Undue influence/ coercion – Tenants may be pressured to apply by relatives or third parties who stand to gain financially or inherit the property, even when it is not in the tenant’s best interests.
• Fronting arrangements – A third party (often a relative or investor) provides the funds, while the tenant is listed as the buyer. This misrepresents who is genuinely benefiting from the scheme and can result in the property being used for profit rather than personal residence.
• Post-sale breaches – Properties are sold or sublet within the discount period, breaching scheme conditions and enabling individuals to profit from publicly funded discounts, reducing the availability of affordable housing.
• Insider assistance – Individuals with access to sensitive data (e.g. contractors or staff) may misuse their position to facilitate fraud. This could involve sharing confidential information, bypassing verification processes, or accepting ineligible applications – all of which compromise internal controls and expose the organisation to reputational and financial risk.

Fraud may be unsophisticated, but its impact is lasting. Once a property leaves the social housing pool, it is rarely recovered.

Recent Lessons from the Sector

Real-world cases highlight the importance of early detection and collaboration:

• City of London Corporation identified a tenant who failed to declare partial ownership of a property on three separate social housing application forms [1]. The individual was found guilty under Section 1 of the Fraud Act 2006.

• City of London also prosecuted a tenant who sublet her property while living in Wales, resulting in a £13,125.60 repayment [2]. Another case led to a £91,480 confiscation order for undeclared property ownership.
• London Borough of Lambeth prevented a fraudulent RTB purchase after discovering the tenant had bought a property in Bristol years before securing his council tenancy [3]. The tenant also failed to disclose substantial savings, saving the council an estimated £127,700.
• Islington Council uncovered a tenant who fraudulently obtained a council tenancy while owning another property [4]. He was later ordered to repay £260,000 under the Proceeds of Crime Act, after attempting to buy the council home through RTB.
• L&Q Housing Association recovered 179 homes through its tenancy fraud team, saving an estimated £7.5 million [5]. Cases included unlawful subletting and fraudulent RTB/RTA applications, with one offender ordered to repay £100,000 in illegal profits.

These examples demonstrate the value of robust screening, data matching, and collaboration with local authority fraud teams.

A Prevention-First Approach

Fraud prevention is most effective when built into everyday processes, not triggered only by suspicion. Practical steps include:

1. Tenant education pre-application – Inform tenants about fraud checks, the need for transparency on gifted funds, and completion of relevant forms to prevent misunderstandings and reduce risk.
2. Verification at application stage – Confirm identity, national insurance number, and residency evidence to establish eligibility and prevent impersonation or false claims.
3. Cross-referencing – Use the Land Registry, electoral roll, and credit checks to identify undeclared property ownership.
4. Source of funds checks – Request evidence of how the purchase will be financed to detect fronting.
5. Consistent screening – Apply the same level of scrutiny to all applications to avoid bias or oversight for fraud as well as safeguarding checks.
6. Internal escalation – Establish clear procedures for staff to flag concerns before applications progress.  Where fraud indicators are identified, staff must escalate cases to the designated fraud officer. Serious cases involving potential criminality should be referred to local authority fraud teams and, where appropriate, law enforcement.

Embedding these steps into workflow systems ensures that fraud prevention becomes a standard part of the RTB and RTA journey.

Data Protection and Lawful Fraud Detection

Fraud prevention must operate within a clear legal framework. Housing associations are data controllers under the Data Protection Act 2018 and the UK GDPR. They may process personal data for fraud detection purposes, provided the processing is necessary, proportionate, and subject to appropriate safeguards.

Housing associations should complete a Legitimate Interest Assessment (LIA) to document the basis for processing personal data for fraud prevention. This ensures compliance with data protection legislation, demonstrates accountability, and allows housing associations to cross-check tenant data with external sources. These activities must be:

• Transparent – Supported by privacy notices and data-sharing agreements.  Privacy notices must explicitly state that personal data may be processed for fraud prevention purposes, including cross-checking with external sources such as the Land Registry, electoral roll, and credit reference agencies. Housing associations should also reference the existence of an LIA in their privacy documentation.
• Secure – Access restricted to authorised staff, with protections against misuse, loss and unauthorised disclosure.
• Compliant – Data retained only as long as necessary or required by law.

Housing associations should retain fraud investigation records for six years after case closure (unless a longer period is mandated by regulatory guidance or legislation). After this period, data must be securely deleted or anonymised.

A clear retention schedule and internal guidance help ensure fraud detection remains both effective and lawful.

Governance and Oversight: Building a Culture of Vigilance

Fraud prevention is a strategic governance issue, not just an operational task. Boards and executive teams must treat RTB and RTA fraud risks as corporate risks, with visibility on risk registers and regular internal audit review.

Key governance actions include:

• Policy clarity – Define fraud checks, escalation routes, and referral criteria.
• Staff training – Equip teams to spot red flags and escalate concerns.
• Collaboration – Engage with local authority fraud teams, regional forums, and the National Fraud Initiative.

Boards should receive quarterly reports on fraud prevention activity, including the number of referrals, confirmed cases, and financial recovery outcomes, which all help to provide assurance. This ensures transparency and supports strategic risk management. Boards should also ensure that fraud prevention policies are reviewed annually and updated to reflect changes in legislation, sector guidance, and organisational risk appetite.

Ultimately, culture is critical to effective governance.  When staff at every level see fraud awareness as part of their role, the housing association becomes far harder to exploit.

Preparing for Policy Change

Government enthusiasm for expanding RTB has diminished, reflecting growing concern over the long-term erosion of affordable housing stock. While current reform proposals primarily target local authority housing, the RTA scheme remains available to housing association tenants. However, uptake has declined significantly, with sales falling by 54% between 2022/23 and 2023/24.

Despite this downward trend, the November 2024 reduction in RTB discounts prompted a sharp increase in RTB applications. 67% of submissions in 2024/25 were received within the three weeks immediately following the Autumn Budget announcement, ahead of the discount reduction taking effect [6].

Although housing associations were not directly affected by the discount change, those with preserved RTB or active RTA schemes may still face increased demand or fraud attempts from tenants seeking alternative routes to homeownership.  This heightened activity places additional pressure on staff, who must remain especially vigilant in identifying potential fraud, particularly in rushed or incomplete applications where misrepresentation or fronting may be concealed.

For housing associations, this does not reduce the fraud threat, it changes its form. With fewer legitimate applications, fraudulent attempts may become more targeted, exploiting procedural gaps or organisational complacency.

Now is the time to strengthen internal controls by:

• Reviewing and standardising RTB/RTA processes across teams to ensure consistency in educating tenants about fraud checks and why they are necessary, clear documentation of decisions, and compliance with internal policies.
• Developing joint fraud response protocols with local authorities and auditors to streamline referrals, investigations, and intelligence sharing.
• Applying data analytics to flag anomalies across tenancy and application records.
• Ensuring data retention and information sharing remain lawful and proportionate, in line with UK GDPR and the Data Protection Act 2018.

Fraud prevention is just as vital in a contracting market as in a growing one. Each sale still carries risk, and every fraudulent purchase represents a permanent loss to the sector.

Conclusion: Fraud Prevention Protects Homes, Trust and Organisational Integrity

Fraud within RTB and RTA schemes may appear low risk, but its impact is profound. Every fraudulent sale reduces the stock of affordable homes, undermines public trust, and diverts resources away from those in genuine need.

For housing associations, fraud prevention is not just about compliance.  It is about:

• Protecting valuable housing assets from permanent loss
• Safeguarding the organisation’s reputation and ensuring public confidence
• Ensuring fair access to homeownership for eligible tenants
• Reducing financial exposure through early fraud detection and prevention
• Strengthening governance and demonstrating accountability to regulators and stakeholders

By embedding consistent checks, lawful data-sharing, and a culture of vigilance, housing associations can ensure that access to homeownership remains secure, transparent, and equitable.

[1] National Fraud Initiative Report 2022 – 2024 (HTML) – GOV.UK

[2] Appendix 4 – Social Housing Tenancy Fraud Case Studies.pdf

[3] National Fraud Initiative Report 2022 – 2024 (HTML) – GOV.UK

[4] Islington Council wins back £260,000 in landmark tenancy fraud case | Islington Council News

[5] Major social landlord recovers 179 social homes after tenancy fraud crackdown

[6] RTB reforms cause spike in applications but councils expect long-term benefits | Local Government Association