Hackney council have slammed landlords who use “totally unacceptable” legal loopholes to make millions off housing benefits while delivering shoddy accommodation.

The practice, which was exposed in Channel 4’s Dispatches programme, sees landlords convert family homes into poorly designed self-contained units in order to receive more money in housing benefits.

One tenant, who lived in a home with similar conditions, but preferred not to be named, told the Gazette: “There are landlords like this all over London. I lived in a room with a small sink and one cupboard – it was small and shallow.

“No one was working in the building so there was a bad atmosphere and there was also alleged drug use. What attracts people to these properties is that there is no deposit to pay.

“I think it’s happening because unfortunately so many private tenants on housing benefits are labelled as lower class and few speak out because they’re afraid to end up homeless.”

Cabinet member for housing Phillip Glanville said: “It’s totally unacceptable that some irresponsible landlords exploit the benefits system and the vulnerable people who rely on it in this way.

“Not only is it a cynical use of taxpayers’ money, the tenants themselves are often put in danger by things like shoddy wiring and various fire risks. The cramped conditions in which some of them live are also often very poorly maintained.

“Whenever we have a reason to believe a property is being used in this way we will investigate and take the strongest possible action we can.”

Between 2014 and 2015, 135 homes were recovered from improper use in Hackney, -more than double the London average of 55 and more than 20 times the average in England of seven. There are currently 387 investigations still ongoing.

The Gazette contacted a landlord accused of owning such a property but they refused to comment.

The council have urged that anyone who suspects exploitation is taking place to contact their private sector housing team on 02083574866