Housing watchdog orders compensation of £6,000 after council left children with damp and mould for five years

A new report from the Housing Ombudsman has exposed serious and repeated housing failures, including at Southwark Council, with families left for years in damp, mouldy and unsafe homes and offered derisory compensation when things went wrong. 

The Ombudsman’s January 2026 report highlights cases of severe maladministration where landlords failed to act, ignored residents’ complaints and did not follow their own compensation policies. One Southwark case cited involved vulnerable children living in damp and mould for five years, with the council initially offering just £50 before being ordered to pay £6,000. 

The findings come just weeks after Liberal Democrats revealed that Labour councillors had removed formal oversight of major works, dropping scrutiny of some of the council’s biggest housing projects despite mounting evidence of serious problems in the housing department. 

Southwark Council has already been found to have “serious failings” by the Regulator of Social Housing. Liberal Democrats say the Ombudsman’s latest report shows the consequences of weak leadership, poor management and a lack of accountability at the top of the council. 

Commenting, Cllr Victor Chamberlain, Southwark Liberal Democrat Group Leader said: 

“This latest case highlighted by the Housing Ombudsman exposes the human cost of Labour’s negligence on housing. Far too many families are living in damp, overcrowded social housing as a direct result of Labour’s failure to maintain its existing stock, or build enough new genuinely affordable homes.  

Despite claims to the contrary, residents know that Labour cannot get Southwark out of the mess it has created.  

Liberal Democrats will fix Southwark by overhauling Labour’s broken housing department to deliver a service that treats residents with respect, and provide the high quality housing that everyone deserves.”