Mortgage fraud on the up

Mortgage-related fraud has increased by 32.8% in the past year, analysis from bridging lender Apex Bridging has revealed.

There was an overall total of 1.1 million cases of fraud between April 2022 and March 2023, a number which is 15.3% higher than the previous twelve months.

One common type of fraud is identity theft and impersonation, in which a criminal will steal a person’s identity, often through the use of fake or stolen ID, and then use that false identity to sell, mortgage, or remortgage someone else’s property before running off with the large sums of cash they receive as a result.

Stolen identity can also result in the title deeds of a property being changed, essentially enabling a criminal to put the property in their own name or that of a co-conspirator.

Chris Hodgkinson, managing director of Apex Bridging, said: “There is so much money involved with property that it’s difficult for career-criminals and chances alike to resist.

“Whether they’re stealing hundreds of thousands of pounds through mortgage fraud, or a few hundred quid through rental fraud, it’s rife and cases are on the rise.

“Property owners and professionals alike need to do all they can to mitigate the risk of property fraud.

“That means dealing only with respected and trustworthy organisations and service providers, and being awake to any red flags.

“Criminals often succeed because honest people lack caution and due diligence. Here at Apex Bridging we undertake vigorous ID checks to protect our business and our borrowers but everyone needs to play their part to make it as hard as humanly possible for these crooks to succeed.”

Apex Bridging analysed the number of fraud and computer misuse offences in England & Wales recorded by Action Fraud or referred to the National Fraud Intelligence Bureau (NFIB) between April 2022 and March 2023, and looked at how these numbers compare to the 12 months previous.

Mortgage fraud on the rise

Mortgage fraud is another common type of property fraud in which criminals seek to steal money from a financial institution or private lender through the mortgage process.

In the past year, mortgage fraud in England & Wales has increased by 32.8%, the second-highest increase of all banking and credit industry fraud.

The good news, relatively speaking, is that the total number of identified cases (1,723) makes it the second-rarest form of banking and credit industry fraud, accounting for just 0.2% of total cases within this sector.

Rental fraud also increasing

Another common form of property fraud is rental fraud, in which would-be tenants are tricked into paying an upfront fee to rent a property that, more often than not, doesn’t exist.

Rental fraud has seen a smaller annual increase (5.1%) than mortgage fraud, but remains far more prominent with 5,098 reported cases across the year. This figure also makes it the third-most frequent form of advance fee payment fraud, accounting for 11.2% of all cases.

How to protect yourself against property fraud

People are most vulnerable to property fraud if they are landlords, live overseas, keep their property empty, have unmortgaged property, or don’t have their property registered on His Majesty’s Land Registry (HMLR).

To protect against falling victim to property fraud, you can register title deeds with HMLR, use strong passwords when sensitive personal data is at stake, and be cautious when using public or unfamiliar Wifi.

Property professionals need to be wary when clients show signs of urgency without explanation, and also be wary of clients who are reluctant to provide information or answer basic questions. If the seller of a property doesn’t actually live in the property, it’s worth additional due diligence, and if any changes are made to the client’s bank account during the buying or selling process, this is another red flag that requires close attention.