london-housing-scam
Marine Leger and Juan Gonzalez. Photo: Theo McInnes

The Kafkaesque Housing Scam That’s Tearing Through London

Vulnerable tenants are becoming entangled in a complex web of housing scams that are spreading like wildfire through London, VICE World News can reveal.

LONDON – In late October 2019, 29-year-old Juan Gonzalez travelled to an unassuming estate agent in east London to fulfil that basic human need: finding a home. Gonzalez had moved from Spain’s northwest region of Galicia to the UK with hopes to improve his English and find work. Bricklane Homes, the organisation advertising a room on the website Spareroom, had already rented out his first choice. But, the estate agent told Gonzalez, there was another room available in Oval, south London, exactly where he was looking. He wouldn’t be able to view it right now, the agent said, because Bricklane Homes was understaffed. In London, where there is a huge dearth of affordable places to rent, Gonzalez knew a good room would go soon. With his previous tenancy coming to an end in two weeks, he transferred over a deposit, a month’s rent of £693, and signed a contract under the title “Guest.” 

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When Gonzalez arrived at his new home, he was stunned at what he found. “When they showed me the pictures, the room was brand-new. But when I was there, the paint on the walls was coming out, the plaster was broken, the door was hanging off the wardrobe, [and] the room was damp. The house had one toilet. For eight people? That's crazy.”

Eight people were living in the house, not the six he’d been told. It was also clear it had not been cleaned since the last tenant. Gonzalez logged onto an app he was told to download by Bricklane Homes, called Guest Management App, and used the chat function to communicate with the agents responsible for the house. He informed them that it wasn’t good enough, but without another option, he decided to stay. 

On the other side of London, Marine Leger, 29, was also looking for a new place to live. Leger had lived in London for nine years since moving there from Lyon in France, and after breaking up with her boyfriend at the beginning of 2021, she was suddenly homeless. With some urgency, she found a property online and was told over WhatsApp by an estate agent that coronavirus restrictions would make it illegal for her to view the place (which was not actually the guidance at the time). She agreed to sign a contract with a company called RoomHub, managed by a company called AEY London. Under the title “Guest”, she signed her name on a digital contract and transferred over a deposit and rent. 

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When she arrived at the house in Leytonstone, east London, it was nothing like she’d expected. The house had been illegally partitioned to create extra rooms, and her room didn’t fulfil the basic habitable standard to lease out. 

“I asked one of the housemates, 'How many people are here?’ ‘Too many people,’ [he said]. He was not happy,” says Leger. “Opening the door, my first reaction was ‘Oh shit. Right.’ I had a window [in my room] going onto the kitchen where everyone does everything. There were no lightbulbs. I was struggling to get into the room because it had a padlock. I saw all these problems: walls rotten in the bathroom, dangerous steps in the dark. The mattress was giving me bruises.”

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Marine Leger outside her house in Leytonstone, east London. Photo: Theo McInnes.

Leger unlocked her phone and opened up the Guest Management app the agents had told her to download and messaged them about the condition of the property.

They didn’t know it at the time, but Leger and Gonzalez had become entangled in a complex web of housing scams that are spreading like wildfire through London. 

This shadow rental sector where companies appear and disappear to avoid accountability can be hard to understand. But behind Gonzalez and Leger’s cases were a web of different criminal actors all working in a city where underfunded local authorities have little ability to fight back, and criminal actors vanish without a trace. Their stories would link to a criminal scam from 2016 the courts believed had stopped. Years later, has it returned? Or did it never really go away?

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Gonzalez’s housing situation in Oval was far from ideal, but at least he had somewhere to live. Meanwhile, he was working in a restaurant in Covent Garden and improving his English as autumn became winter 2019, and before he knew it, it was 2020. But then, as the coronavirus crept across the globe, hitting London hard, his income stream stopped. He was placed on furlough in March but didn’t receive any pay until two months later. 

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Juan Gonzalez outside the flat where he was illegally evicted. Photo: Theo McInnes.

On the 9th of April, 2020, Gonzalez logged onto the Guest Management app and tried to explain his situation. He said he’d be late to deliver some of his rent but would pay in full as soon as he received his wages. At the time, the government had encouraged landlords to be compassionate to their tenants as a mortgage holiday for homeowners was introduced. An eviction moratorium was also brought in, meaning it would be illegal to evict a tenant during the pandemic. 

So when men started to turn up to hassle Gonzalez for his rent, he was confused. A man eventually arrived at Gonzalez’s door to remove his stuff. A video from that day shows Gonzalez enraged as the tattooed man begins to remove stuff from his room and take it outside. “Thank you so much,” Gonzalez says sarcastically. “Very good. Do what damage you want.” The man continues to put his belongings into a black bag, claiming to be the landlord’s brother. 

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Things would soon start to deteriorate for Leger, too. After she’d lived in the property for three months, the letting agent she’d been communicating with disappeared. Leger reached out to housing charity Safer Renting for help, and after they contacted the agency, the contact “disappeared”. 

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Marine Leger's room, with a window into the house's kitchen. Photo: Ruby Lott-Lavigna for VICE World News.

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A narrow coridoor in Marine Leger's house. An illegal party wall was put in to add more bedrooms. Photo: Ruby Lott-Lavigna for VICE World News.

“He said he was leaving in a month and not answering,” said Leger. “I asked for an email address from the company, they gave me one email address to get rid of me. I tried to email and never had a response.”

On the app, Leger received a message phrased as if she were a guest about to leave an Airbnb, not a tenant in her home (with all the rights of a tenant). “Your move out is expected… please see below the steps. Vacate the accommodation by 11 AM - Send us an inventory, including photos of the condition of the room… We thank you for your stay and hope to see you in the future.” 

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A screenshot of the eviction notice sent to Marine Leger on her Guest Management App. Photo: Courtesy of Marine Leger/Safer Renting.

It would be her last contact from “RoomsHub.” Gonzalez and Leger would later find out that their homes were being rented out illegally. While Gonzalez’s home was owned legitimately by a property owner, they had allowed a separate company to let it out, and that company had exploited both the tenant and the owner of the building, overcharging and letting out extra rooms for additional profit. The company that rented Gonzalez his room, Bricklane Homes, and the company on the letting agreement, London Homes Property Management, were both shell companies sharing bank details with Simple Properties, a company that had previously been taken to court by two London boroughs. The same was true for RoomsHub and AEY London.  

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“This type of scam is prolific in London’s rented market,” John-Luke Bolton at the organisation Safer Renting, who first came across the Simple Properties scam, told VICE World News. “At Safer Renting we come across them on a weekly basis. The criminals behind these scams have created a business model that is deliberately hard to enforce against. They hide behind multiple companies and are able to dissolve these companies when successful action is taken against them.”

There is a housing crisis in London and almost every major city in the UK. Limited housing stock means landlords can raise prices to inordinate amounts, often irrespective of the quality or location, exploiting renters who may be young or working-class or in a precarious financial situation. According to a 2021 Housing Report from the Greater London Authority, the average private rent per square metre in London increased around 162 percent between 1996 and 2018. The report also found that “London's rents are so much higher than those of other regions that the median monthly rent for a one-bedroom home in the capital (£1,224) is higher than the median rent for a home with four or more bedrooms across all of the North and Midlands.” For those with English as a second language, understanding dense housing laws such as when a landlord can evict you or what is needed for a legal tenancy can be complicated. This makes them particularly vulnerable. 

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Despite the eviction notice, Leger and two other housemates have refused to move out. Her terrace house looks like many others along the road in Leytonstone, making you wonder how many houses you walk past every day are illegally run. 

Inside, the house is claustrophobic. Whoever was letting the property has erected walls to create new rooms, leaving corridors that feel only as wide as your shoulders. Leger points out a large cavity in the ceiling that has been ignored. Debt letters littered at the entrance read, “Please pay the total amount you owe to avoid potential committal to prison and further costs”. She’s never heard of the people they’re addressed to. She shows me her original bedroom, a tiny box room with a window to… the kitchen area. The toilet, the only one for the eight tenants, was broken for a while and they had to use the toilets at the local 24-hour Asda supermarket. 

All of Leger’s contacts at RoomsHub have now disappeared. Until Leger and her housemates figure out – with the help of Bolton and Safer Renting – who’s legally entitled to receive the rent, they’ve stopped paying it and remain in the property with little ability to secure basic improvements. The letting agents have simply disappeared into thin air. 

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Gonzalez outside his old flat in Oval. Photo: Theo McInnes.

It can be hard to pin down the people responsible for Leger and Gonzalez’s nightmares. But a trail can be established between Simple Properties and a company fined thousands of pounds in a landmark prosecution in 2019. In 2019, a company called the Lifestyle Club Ltd. was fined £6,000 plus victim compensation and legal fees amounting to £42,000 by a London council for its attempt to treat tenants like “members,” and subsequently breaching tenancy laws. The Lifestyle Club Ltd., owned by an individual named Gian Paolo Aliatis, took a £200 “joining fee” which was non-refundable, rather than a deposit, which legally is refundable and should be protected by a deposit protection scheme. Tenants – called members, much like Gonzalez and Leger were – were also asked to pay a monthly “membership fee” rather than rent. Aliatis was fined for unfair commercial practice after pleading guilty on three charges. 

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After the case closed, Simple Properties Management (which lists a Miguel Cabeo Cespedes as its director) took over properties previously run by The Lifestyle Club Ltd. Although the companies changed, the claimant in the original case says in court documents that she continued to visit the same office and work with the same staff, confirmed by correspondence at the time. A court judgment against Simple Properties Management shows that the claimant, originally in a Lifestyle Club Ltd. agreement, faced an illegal eviction once the property was taken over by Simple Properties Management, including having the locks changed on the property while she was out and having her personal property removed. Eventually, Simple Properties were made to pay damages of £56,675.91 in a civil case plus legal fees. The lawyer representing the client told VICE World News the fine was never paid as the company eventually dissolved. 

Aliatis denies any similarity between the two companies. “We have never shared offices with any company operating within the same industry. From 2018, we sold parts of our property portfolio to various companies, one of them being Simple Properties."

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Figures named in court cases against Simple Properties, like Cespedes, are hard to track down. They often do not appear in court as they do not attempt to defend their case (in some cases because they’re facing other charges at the time, as was the case with Cespedes) and leave very little information online. Aliatis, the mastermind behind the original Airbnb-like scheme, however, is far from hidden. The “entrepreneur” – who runs a blog with the slogan EVERYTHING YOU WANT IS ON THE OTHER SIDE OF FEAR on its landing page – declined numerous requests to speak by phone. Over email, he said that in his opinion, “shared accommodation in London is one of the answers to the London housing needs”, but due to complex “regulation” and “the demonisation of Landlords by councils and media” there are simply too few to solve the housing crisis (in the UK, the private rented sector has the worst affordability and conditions despite being extremely prolific). 

Aliatis – whose name appears 15 different times on Companies House, a UK register of companies – claims he no longer lets any flatshares, according to an email sent to VICE World News. 

Despite denying he’s currently involved with Simple Properties or any other rent-to-rent companies, both Gonzalez and Leger's stories of exploitation link back to Aliatis and bear a remarkable resemblance to the schemes run by Simple Properties and the Lifestyle Club Ltd. 

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Firstly, the scam companies on Leger’s tenancy contract (seen by VICE World News) – PMC Collection and Management Services Ltd. – listed 95 Mortimer Street as its address on Companies House. This is the same address listed for the Lifestyle Club Ltd. Secondly, someone called “Frosina” communicated with the property owner using the email address smartgates@gmail.com. Frosina had another email address: frosina.brkv@gmail.com – BRKV is a company currently owned by Aliatis.

There are also links to Gonzalez. The property owner of Gonzalez’s house also held a contract with PMC Collection and Management Services Ltd. The property owner would frequently correspond with the company letting out his property. The email? smartgates@gmail.com. The person he emailed about letting out of his property? Paolo and Frosina. 

VICE World News reached out to Aliatis. He said: “I am proud to have achieved a large volume of success having housed thousands of tenants over the years in an industry riddled with ambiguous laws and lots of grey areas… despite efforts from institutions like Islington council or Camden council to discredit my companies.”

BRKV doesn’t only appear in an email address used by Gonzalez and Leger’s respective property owners. The app used by Gonzalez and Leger – the one that told Leger to move out and thanked her for her stay – was built by BRKV Tech, originally owned by Aliatis, but according to him was sold in 2016 (in order to verify this, we were told to look at Macedonia’s version of Company’s House). However, he still owns a company called BRKV that shares a website very similar to BRKV Tech’s, with an almost identical slogan.

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We put this to Aliatis, and he said: “The intended use of property management apps and their software is to manage properties. It is impossible for any software company to start policing or be held accountable for its clients’ use of the software. For example, UBER cannot stop car accidents.” 

These rent-to-rent housing scams are rife in London, yet they’re incredibly hard to crack down on. Often, local councils are responsible, although the lines of enforcement are blurred. In London alone, local councils have faced a 63 percent decrease in real-terms funding over the last ten years, which has led to the removal of enforcement officers responsible for scams like this. 

Although illegal evictions are a criminal act, only the police or local authorities can pursue these evictions, not tenants. If the council or police won’t pursue the case on behalf of the tenants, all they can do is sue in a civil case, which often results in the company dissolving to avoid liability. When it comes to police, they’re often no help either. In the case against Simple Properties, when it took over the Lifestyle Club Ltd.’s rooms, a court judgment says that the criminal landlords convinced police they were enforcing a legal eviction, so much so that the police failed to help the claimant, and were even convinced “not to take this unlawful eviction and the taking and destruction of the Claimant’s belongings seriously.”

“There are lots of reasons why it's very dispiriting for local authorities to pursue these cases through the court,” Dr Julia Rugg, an academic at the Centre for Housing Policy based at the University of York, says. Because the cases are criminal and not civil, “it's quite hard to get the evidence together [as] there's got to be evidence of up to a certain level of evidential value.”

But even when councils do target scam housing organisations, there’s very little to stop the companies from dissolving and reemerging with a different name. Indeed, in 2020, Camden Council took Cespedes and Simple Properties to court for fire and electrical safety breaches in a house of multiple occupancies, resulting in something called a “banning order” – which effectively stops that company, or person, renting out a property or working as a letting agent. Despite a ruling in 2021, and various fines across the country, it is likely those responsible for Simple Properties, under a different name, were still able to rent out Leger’s property and slip away as soon as anyone started asking questions. 

Although the council can have the power to investigate illegal evictions, drastic cuts to services means many don’t. 

“It is a big problem,” said Rugg. “It's not just some landlords being a bit naughty because they don't know what their responsibilities are. It's much more serious than that.”

For now, letting agents who have perpetrated this scam continue to rent rooms, making huge amounts of money off vulnerable tenants. According to Safer Renting, the letting agent in Gonzalez’s case was paying £700,000 for various properties, which gives some indication of how lucrative this scam must have been. On the Bricklanes Homes website, before it was taken down, hundreds of rooms were listed. Multiple other shell companies who let out properties can be linked to the ones mentioned above, sometimes with the same bank details, or names just slightly changed. 

Gonzalez now lives in Tooting, south London, and is still enjoying practising his language skills in the city. After the difficulties with his last property, which left him homeless and sleeping on friends’ sofas, he eventually took his letting agent to court. Thanks to the work of Safer Renting, the court found that the letting agent committed the offence of an unlawful eviction and the agent was ordered to return the entirety of Gonzalez’s rent plus his legal fees. When the damages were eventually meant to be extracted from Bricklane Homes’ account, the company had disappeared and its account had closed. 

Once again the perpetrators were nowhere to be found, hiding in the foggy underworld of the shadow renting sector.