The Charity Commission has said it will be engaging with the trustees of a charity after a BBC investigation said it had earned an associated letting agency £5.5m.
The letting agency, Investing Solutions, was paid over £5.5m in benefit payments in the last two years by finding properties for single homeless men, a BBC investigation has claimed. The charity, Fresh Start Housing, finds clients from London homeless charities and refers them over to the letting agency. Both the charity and agency were set up by Samir Patel, the BBC said.
Investing Solutions makes money “by putting several unrelated people in one house and charging housing benefit for each person, rather than the property. Therefore, the total benefit payout is higher than the rent fee passed on to the property's landlord,” the BBC reported.
Investing Solutions told the BBC that "the bulk" of their rents get passed to private landlords, while Fresh Start said they referred clients to both Investing Solutions and private landlords.
The Charity Commission said they “are aware of the concerns regarding this charity and will be engaging with the trustees of the charity”.
Patel set up Investing Solutions in 2002, before going on to set up Fresh Start Housing in 2010. Both organisations are based in the same building, a storage unit in Battersea, London.
The BBC has clarified that neither the charity nor the company are acting illegally, but homelessness charity Crisis called the arrangement “a new low”.
Patel told the BBC that that Fresh Start Housing was an independent charity with its own board of trustees.
He said 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".
Fresh Start Housing, which is now 102 days late in filing its accounts with the Charity Commission, and also late filing with Companies House, has as its objects the “provision of support for homeless people and those about to be homeless”.
The BBC reported that in one property it 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.
Nearly half the money that Investing Solutions has received over the past two years has been paid by Wandsworth Council in south London, which has paid the lettings agency more than £2.1m, it was reported.
Speaking to the Evening Standard, Patel denied a link between Investing Solutions and charity Fresh Start Housing. He would not confirm nor deny that £5.5m was paid to his company over a two year period but said the figure was "probably accurate".
Both Investing Solutions and Fresh Start Housing have been contacted for comment, but neither organisation had replied at the time of publication.
