Criminal landlords who rent out illegally dangerous homes will be forced to give up all their earnings, following a court ruling that could strengthen powers to tackle Britain’s worst housing.

Lawyers for Brent council in north-west London have been granted the right to use the Proceeds of Crime Act against a family of landlords who earned hundreds of thousands of pounds by cramming up to 40 people into a single home licensed for seven people.

The decision sets a precedent in cases where landlords are found to have rented homes with criminal levels of environmental health and safety breaches. Until now, councils have only been able to levy fines, which are charged at a fraction of potential earnings.

The ruling comes after the Guardian this week exposed criminal landlords operating an illegal house of multiple occupation in east London. They were fined close to £30,000 for breaking housing regulations including over-occupancy, multiple fire safety breaches, mould and corrosion, but continued to rent out rooms for £350 a month that were illegally squalid.

“Where there are criminal offences under the housing act, this ruling opens the door for local authorities to go after these slum landlords who are earning hundreds of thousands of pounds on each house,” said Edmund Robb, barrister at Prospect Law who fought the case.

Brent council is now planning to pursue Harsha Shah, Chandi Shah, Jaydipkumar Valand and Sanjay Shah who were last year convicted of housing offences relating to a semi-detached house in Wembley.



The first two defendants were earning at least £6,000 a month from a property with 25 to 40 people living in what the judge ruled were “appalling living conditions that are grossly overcrowded and unsafe”. There was one kitchen and two bathrooms shared by the tenants, some of whom lived in the garden shed. Many of the residents came from India, paid £60 to £70 a week and slept on bunk beds.

More than 120,000 people in England and Wales are believed to be living in illegal houses of multiple occupation. More and more people are squeezing in together as high rents leave the poorest little choice but to rent shared properties. Exploitative landlords have also realised that local councils lack the resources or powers to stop them. Almost a third of houses of multiple occupation are now believed by the government to be unlicensed – some 23,000 properties.

Half of councils in England have served zero or just one enforcement notice under the Housing Act in the last year, according to information released under the Freedom of Information Act.