Outrageous loophole that lets council tenants rent multi-million-pound properties for peanuts, 'swap' them with each other and leave them to their families: ROSS CLARK

By ROSS CLARK FOR THE DAILY MAIL Published: 01:00, 9 July 2026 | Updated: 01:12, 9 July 2026 If, like millions of millennials and Gen Z-ers, you are paying over £1,000 per month to rent a grotty room in a shared property in a distant borough at the edges of London, look away now. How would you fancy a three-bedroom flat occupying both the first and second floors of a grand, stucco-fronted house on a quiet street in the heart of Pimlico, just a few minutes’ walk from the Houses of Parliament – for £143 per week? On the open market, you’d have to pay around £950 per week to rent such a property – about £50,000 a year. To buy, it would easily set you back £900,000. ‘We’ve lived here happily for the past 40 years and are now looking to downsize,’ say the tenants, who are looking to find a nice two-bedroom bungalow in Sussex. For £143 a week, by contrast, the choice for private renters on Rightmove is pitifully slim. You could just about get a house-share in a crummy flat in distant Ealing, on the way towards Heathrow airport, or a slightly larger room in Thamesmead, the Brutalist area made famous in the horror film A Clockwork Orange. Otherwise, all you can get for that price is a garage. The website homeswapper.co.uk is a looking-glass world in which handsome houses and apartments in some of the most expensive areas of real estate in the world can be rented for a song – but not, most likely, by you. HomeSwapper enables council-house tenants to exchange their tenancies. Rather than have to go through the tedious process of reapplying for social housing via a waiting list that can take years, one tenant can simply ‘swap’ their council house with someone else, anywhere else in the country, virtually for free. If you can arrange a so-called ‘mutual exchange of tenancy’ under the Tory-Lib Dem coalition government’s Localism Act 2011, the housing provider, be it a council or housing association, cannot increase the rent for either party. Lucky for them! How would you fancy a three-bedroom flat occupying both the first and second floors of a grand, stucco-fronted house on a quiet street in the heart of Pimlico, just a few minutes’ walk from the Houses of Parliament – for £143 per week? (flat on Cambridge Street, Pimlico) If you are prepared to go south of the river, you could bag a three-bedroom terraced house on St Philip Street, Battersea The house on St Philip Street features a beautiful new bathroom and is only £650 per month If you are prepared to go south of the river, you could bag a three-bedroom terraced house on St Philip Street, Battersea, featuring a beautiful new bathroom, for a mere £650 per month – cheaper than a room in an average flatshare. The current tenant explains that this was once a four-bedroom house, but since he needed only three, he had it knocked through to create a ‘massive 8 metre by 4 metre lounge’. He now wants to move to a ‘three to five’ bedroom house in leafy Wimbledon or the historic royal stomping ground of Richmond upon Thames. The Battersea house, rented on the open market, might cost £3,750 per month – and well more than £1 million to buy. Perhaps grandest of all the properties currently listed on HomeSwapper is an elegant terraced house in Slaidburn Street, just off the King’s Road in London’s Chelsea – for just £180 per week. ‘A stunning, exceptionally beautiful, huge Victorian four/five-bed townhouse, with garden, in very, very quiet no-through road,’ gushes the current lucky occupier. ‘Decorated to exceptional standard which will take your breath away when you see in person. REAL WORKING FIREPLACE!’ (All of London, incidentally, is by law a ‘smokeless zone’ where the burning of wood and coal to fuel a fire is forbidden.) The current tenant adds that a new bathroom and kitchen have recently been fitted, along with new flooring throughout. A five-bedroom Chelsea townhouse at £180 per week is, roughly, a 93 per cent discount on the market rate. A similar property in nearby Langton Street is currently going for £2,538 per week – or about £132,000 a year in taxed income. To buy, it might cost several million pounds. Not all social housing, of course, boasts such grandeur. Plenty is made up of high-rise, concrete estates built in the 1960s, as well as prefab post-war semis. But across Britain, many councils and housing associations also own hundreds of more appealing properties wildly beyond the reach of even comfortable middle-class earners. Perhaps grandest of all the properties currently listed on HomeSwapper is an elegant terraced house in Slaidburn Street, just off the King’s Road in London’s Chelsea – for just £180 per week The ‘stunning, exceptionally beautiful, huge Victorian four/five-bed townhouse' on Slaidburn Street boasts a 'REAL WORKING FIREPLACE!' - although burning wood and coal to fuel a fire is forbidden in London A property in Langton Street, Chelsea, is currently going for £2,538 per week – or about £132,000 a year in taxed income Some have been recently built on handsome estates as part of compulsory social housing requirements written into planning conditions. Many councils also bought up thousands of large, run-down houses after the Second World War and have been upgrading them over the years. In many cases, these luxury properties are now being let to social-housing tenants for peanuts. But should they be? Social housing is supposed to be a safe, simple place for people on very low incomes to rest their heads and avoid homelessness. It is not meant to be a taxpayer-subsidised opportunity for people to live in grand, multi-million properties in the most expensive postcodes in Britain. As council taxes continue to soar far in excess of inflation, many now argue that the time has come for councils to sell off some of this luxury real estate and invest the proceeds in providing better services to all residents. However, this is not always straightforward. Many tenants enjoy lifelong protected tenancies in law which, controversially, are regularly inherited by their family members on their death – without a bean of inheritance tax to be paid. Outrageously, it is even possible for people who would be nowhere near qualifying for new council house tenancies to inherit them. You could be earning up to £60,000 a year (almost double the median earnings in Britain) and still be swanning around in a taxpayer-subsidised Chelsea townhouse – if, that is, you didn’t fancy swapping with someone in Battersea, Bath or Bristol. Britain has ended up with a bizarre, two-tier rental market with eye-watering differences in costs depending on whether people are renting privately or through a council or housing association. If you qualify for social housing, you can, in practice, end up far better off than someone who does not qualify for it – when you take the value of your heavily subsidised rent into account. This three-bedroom flat in Lurline Gardens, Battersea, is going for £3,500 per month Meanwhile, another three-bedroom flat in Battersea, in Gwynne Road, is £923 per week It also costs £923 to rent this three-bedroom flat in Fulham Road, South Kensington The issue is now causing widespread fury, and especially among ambitious, punitively taxed young graduates paying through the nose to rent privately. In response to a post on a Facebook page called ‘The West London Social Housing Swappers Group’, one writes on X: ‘My wife and I work our socks off to make about £60,000 each. We can only afford a crap two-bed flat in a rubbish part of Zone 3. We have three children and sleep on a sofa bed in our living room.’ Bizarrely, Kensington and Chelsea councillor Jack Reason accused such critics of spreading ‘misinformation’, insisting that multi-million-pound homes were not typical of social housing in the royal borough. Perhaps not, but the question is surely whether any such properties should be used as social housing. The Facebook page has since been taken down. Like so many of his generation, Nye Jones, 34, has found that despite earning an above-average salary of almost £50,000, the dream of home ownership never seems to get any closer. Even less satisfactorily, he has had to strain his finances even to find somewhere decent to rent. His two-bedroom flat in a converted house in Leyton, east London, which he shares with a friend, costs him £950 per month. ‘It has damp and mould and is not well-insulated,’ he tells me. ‘In winter it can cost me another £150 a month for heating.’ According to the Office for National Statistics, the average renter in England pays 36 per cent of their gross – that is, before tax – income on rent. In Camden, north London, they pay an average of 52 per cent of gross income, in Westminster it’s 56 per cent and in Kensington and Chelsea a whopping 72 per cent of gross income, suggesting that renters who choose to live in one of the capital’s most chichi districts must have virtually no money to live on once they have paid their rent. Like so many, Nye Jones – head of campaigns for the pressure group Generation Rent – finds himself caught in the middle. He is not earning enough to save for a deposit on his own flat, but at the same time he is not impoverished enough to qualify for social housing – and why should he, on £50,000 a year? Social-housing rents are calculated according to a thoroughly out-of-date formula based on average local earnings as they stood in 1999, average rents as they stood in 2000 and average property values again as they stood in 1999. This produces a figure which is supposedly uprated in line with inflation. However, this process ignores the fact that average earnings, private rents and house prices have all increased by vastly more than inflation since the turn of the millennium. While private renters have suffered painfully from the runaway boom in house prices over the past quarter-century, social tenants have remained blissfully unaffected by them. They are living in a bubble where it is forever the year 2000 – before mass immigration further caused competition for housing stock to soar, when Britain boasted one of the highest GDPs per capita in the world, ahead of Germany, Singapore and Qatar. (We have now plummeted to 24th.) Social-housing rents are also capped to a certain level, regardless of where the property is or its value on the open market. The only factor that determines the cap is the number of bedrooms in the property, and anyone who has ever bought a house will be stunned at how little value additional bedrooms are deemed to add in the state-mandated world of social housing. The current rental cap for a bedsit is £204 per week. But for a four-bedroom house, it is only £240 – and just £264 for a six-bedroom home. When the Coalition government introduced an ‘Under-Occupancy Charge’ for social-housing tenants rattling around in a property with far more bedrooms than they needed, Labour damned it as the ‘bedroom tax’. Other timid attempts to change this crazy system were damned as ‘austerity’ by the Labour Party, then led by Ed Miliband. Worse still, once a social housing tenancy has been set up, the rent can be increased just once a year by a maximum of inflation (at the CPI rate) plus 1 per cent – even if the tenant’s earnings have increased by much more than this. So long as the tenant’s household income stays below £60,000 – the threshold at which social housing tenants can be charged full market rent – they can enjoy living in their home at a heavily subsidised rent fixed when their personal circumstances were very different. Needless to say, all this is an extraordinary drag on growth. It perversely incentivises anyone in social housing to limit their earnings to a certain level and distorts the free market. The gap between Britain’s two-tier rental market is growing ever wider – no wonder frustrated young renters, when they stumble on the HomeSwapper website, are so cross.