Spotlight on letting agency receiving £5.5m in housing benefit

The BBC is investigating a letting agency that has allegedly been paid more than £5.5m in housing benefit after its owner set up a charity to help the homeless.

The corporation reports that Investing Solutions - based in a storage unit in south London - has received the payments over the past two years by finding properties for single homeless men, usually aged over 35.

Meanwhile the charity Fresh Start Housing - apparently set up by the agency’s owner and based at the same address - finds clients from London homeless charities.

The corporation says neither the charity nor the company is acting illegally. Records held at Companies House show Investing Solutions was set up in 2002 by Samir Patel, who then set up Fresh Start Housing in 2010. The BBC says the documents explain how the charity would help "the needs of current and ex-offenders with a wider goal to reduce poverty, sickness and distress".

Investing Solutions operates in seven London boroughs and is described by the BBC as being one of the largest recipients of housing benefit in the UK. 

BBC Social Affairs Correspondent Michael Buchanan says: “In one property we visited, Investing Solutions was claiming £2,114 per month in housing benefit for two tenants. The owner of the house was getting £1,150 per month, giving the agency an annual gross profit of £11,568 on the one property.”

In a statement to the BBC Samir Patel explained that Fresh Start Housing was an independent charity with its own board of trustees and that the majority of the properties used were sourced from private sector landlords "who, to make exceedingly clear, own the properties. The simple point being, the bulk of the rents gets passed to our private sector landlord clients".

Patel also told the corporation that his firm was "genuinely concerned by some of your allegations concerning the state of one of our landlord client's property".