Two south London councils have paid out almost £20 million in compensation over five years to people living in damp and mouldy homes. 

Lambeth Council shelled out £10,451,000 in disrepair claims to residents between 2017 and 2021. Meanwhile Southwark Council handed over £8,840,000 in compensation over the same period. 

Figures gathered by Inside Housing show the two South London local authorities shelled out more than any other council in England . 

The amount Lambeth spent on compensation has rocketed by £1 million in five years. It paid £2,127,000 in claims in 2017-18, compared to £3,180,000 in 2020-21. 

In January, the Local Democracy Reporting Service revealed the council had paid residents of the Leigham Court Estate in Streatham almost £1 million in compensation between 2017 and 2021. 

Earlier this month the housing ombudsman – the organisation responsible for complaints about local authority landlords – criticised Lambeth for failing to deal with repairs.  

Lambeth Council admitted in November 2021 disrepair claims from residents had shot up 600 per cent in four years. It has launched a plan to bring down the ballooning costs of compensation claims.

It intends to invest £600,000 in an  arbitration scheme for disrepairs – a system where claims are settled by a barrister to avoid residents pursuing damages through no win, no fee solicitors.

Lambeth says the scheme will save residents shelling out money on solicitors and reduce the money paid on legal fees. It previously said residents were having to hand up to 80 per cent of compensation they won to solicitors. The local authority will employ two barristers to hear disrepair cases and award costs. One will cover the north of the borough, the other the south. 

Lambeth Council said: “Lambeth, along with other local authorities, is experiencing a significant increase in the number of disrepair claims. At the end of the second quarter of last year, we had 789 live disrepair cases, six times higher than in 2017.

“The majority of these claims have been submitted by claims lines based outside Lambeth, as law firms seek to supplement loss of revenue throughout the Covid pandemic. Claim management companies who previously focussed on PPI claims have also turned to housing disrepair.

“The council is introducing an arbitration scheme for disrepairs, as tenants’ rents currently fund rising costs and compensation. An investment of £600,000 will then seek to reduce the overall bill to tenants and redirect funds to deliver frontline services to tenants.

“Lambeth has invested hundreds of millions of pounds in improving its council homes and estates in recent years, and homes on the Leigham Court Estate have benefitted from improvements including new bathrooms and kitchens under the Lambeth Housing Standard. 

“The council is now pushing ahead with a rolling programme of improvement works, including windows, for properties on the Leigham Court Estate. This will include work to 60 homes in this financial year and more in 2022/23, simultaneously the council are undertaking external repairs, decorations and other works to 41 homes on the estate.”

Southwark Council has been contacted.

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