London council at centre of fraud investigation reveals properties were sublet on Airbnb

Mr Key told the meeting that some people had used false documents to apply for the homes, while others had used legitimate documents with “the sole intention” of using the properties for other means, such as listing them on Airbnb.

The counter-fraud officer also revealed the council was struggling to get all the information they need from the short-term lettings site, and it was hard to get the company to remove listings for council-owned properties.

“They won’t engage, they won’t take our word for it. I’ve been through the process myself to try and get properties removed, and it is painful – that is the politest way of putting it,” said Mr Key.

“Unfortunately, it is going to mean court action. And that is something I need to work with B&D Reside on,” he added.

Labour councillor Rocky Gill asked if there was a need for collective legal action against Airbnb across London boroughs.

In response, Mr Key said he was “totally right” and that he had held discussions with other councils in the capital: “Ultimately, it requires us to take a more hardline approach with Airbnb. It is a problem across London, affecting every single council.”

Operation Chandrila ran from November 2020 to December 2024, after evidence was found that corrupt housing officers had fraudulently allocated several hundred properties to people for personal financial gain.

Mr Key said the council had worked with B&D Reside to put stronger measures in place to prevent fraudulent applications getting through, but the scale of the problem was “very big” and affected “multiple housing blocks”.

He said: “This is a City of London Police-led investigation so we are at the mercy of their investigation.

“Linked to that investigation, we continue to work on our own issues with B&D Reside in terms of properties and recoveries.

“We’ve got lots and lots of cases that we’re dealing with where people have breached their conditions of tenancy, [and] in some instances obtained the properties by deception.”

A spokesperson for Airbnb said: “We have a clear process for local authorities to alert us to social housing fraud, [after] which we investigate and remove these listings from our platform. We have also worked with the Public Sector Fraud Authority to pilot an initiative to further help local councils identify and remove illegally let housing properties.”