I'm no expert on this, ScuttleButter is your lady. :)
The owners are definitely not nice types, that's for sure.
Problem is that the main ways of dealing with them are roundabout. To be registered as breeders in law they only have to be breeding more than your OP suggests, over 4 litters in any one 12 month period. That said, if their FAMILY also breed, even from a different address, they need to be licensed with the local council.
However, Walsall Council, picked at random as an example, describes the law as thus:
"One extension, to all of this is that the law primarily relates to the carrying on of a business, and it is therefore open to the Local Authority if it felt the individual facts of the case warranted it to require a person where bitches produced less than 5 litters per year to have a licence if it felt the person was quite clearly rearing dogs for commercial gain on a business footing. For the vast majority of cases, however, it is felt that the ?litter test? of 5 litters per year will be the relevant issue."
As you see, the problem appears to be that there has been no test case for a breeder of less than 5 litters and so councils and Trading Standards tend to go by the 5 or more rule. :(
To me as an owner the set up on your profile is morally wrong, dogs belong indoors, but may not be an issue to welfare organisations as long as the dogs are cared for, exercised, have access to food and to water AT ALL TIMES (worth remembering) and soforth. There may be a welfare issue with accommodation for such large dogs although IME the lack of walks is something that the RSPCA seem to be "meh" about as unless there are other clear pointers (very long claws indicating no walks, for example) I guess it's almost impossible to prove.
The other ways to address this are environmental health concerns - is there a lot of poo around, is there excessive noise and so on? If so, report to your council's EH department. Also have a word with your Dog Warden, if your council still has someone specifically employed for that task, get them to investigate, you never know, they have already got any concerns. Yours might be just the call that gives them the reason to act. I'll see of anyone I know knows your local DW, I'm not aware of anyone who does but will try, it may give you an introduction and an idea of what they're like to deal with if so. I'll also ask a Dog Warden contact of mine who in his spare time is a seriously avid rescuer, he will know how to approach this, what to say and ask yours.
The tax office is another way to deal with these people.... they have an undeclared income, two litters in 18 months, average 5 pups a litter at, what, £500 a pup? It all adds up and the tax office will be interested and of course anything you say is confidential, as it will be to the Dog Warden and RSPCA. As I said, ScuttleButter is a true expert on this, she does loads of work investigating puppy farms, I hope you don't mind but in a mo I will put a thread up asking for her help.
Added to this, call your council's licensing department and ask them if the owners are registered. I'm almost certain that they won't be but it will give the department a heads up and might result in some shared information.
I'm SURE I've missed something but can't think what. Time to find ScuttleButter! :)