Quadruple surge in fake tenancy applications

Fraudulent tenancy applications have quadrupled in the last two years, according to new research.

Referencing agency Homelet says they have seen a surge in fake tenancy applications receiving nearly 200 per day.

According to the 2020 Fraud and Corruption Tracker by the Chartered Institute of Public Finance and Accountancy (CIPFA), false tenancy applications are the fastest-growing area of housing fraud, costing an estimated £60.1m in the UK.

Stranglehold of new regulations

The referencing agency says as the shortage in supply continues this has sparked fierce competition among renters.

Andy Halstead, chief executive officer of Homelet and Let Alliance, said: “Landlords are exiting the market in droves because of increasing mortgage rates and the stranglehold of new regulations.

“The lack of supply this creates means tenants are battling at least twenty other people to secure a home and paying record prices. When coupled with the cost-of-living crisis, it is a dire situation for all.

“As a result, we’re seeing fraudulent activity surging. Not only from career criminals, who are cashing in on the chaos but from people who would never dare commit fraud out of desperation to secure a property.”

Change in government is unlikely to help

The most common fraudulent document received by HomeLet involves edited bank statements, primarily for income inflation, mimicking employment, or concealing illegal income sources.

According to the referencing agency, 89% of failed applications in January 2024 were declined due to fraudulent bank statements.

In 2023, London, the Southeast, East of England, and Wales took the lead in fraudulent activities.

Mr Halstead adds the government must look for solutions to tackle fraudulent tenancy applications: “There are no winners in the rental industry at the moment, and without drastic change, it will be the same for the next few years.  What the government fail to understand is the huge problems they have.

“A change in government is unlikely to help. Decisions are being made based on winning votes, often without the knowledge required to fully understand the consequences of the decisions.

“What is obvious to professionals who support the property rental industry appears to escape the minds of those in power. It has never been more important for the industry to look for solutions that tackle the issues head-on. And the ‘old’ way of completing references is simply not good enough for today’s and tomorrow’s market.”

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