Securing a rental property has been a competitive business for tenants in recent years as demand continues to outstrip supply.
With that competition comes the need for tenants to present themselves in the best possible light to landlords if they are going to seal the deal.
However, the lengths some would-be tenants are prepared to go to has taken a turn in the past year amid a sharp rise in the amount of fraud, including producing fake payslips.
The amount of fraud among tenants jumped 141 per cent last year compared to 2022, according to analysis by referencing experts Goodlord.
Some tenants are resorting to fraud in order to secure a new home amid a fiercely competitive rental market
It suggests some tenants feel they have no option but take extreme steps to ensure they are in the running for a rental property.
Goodlord analysed a sample of 300,000 tenancy applications from 2022 and compared it to a similar number last year.
In 2022, 1.2 cases of fraud were picked up for every 1,000 applications. Last year, that rose to 2.9 cases in every 1,000, a rise of 141.6 per cent annually.
The most common form of fraud detected in the data was payslip fraud.
This is where tenants either boost their income or edit its source, such as changing a company name.
And the methods being used to carry out this type of fraud range from basic editing through to the use of software, such as photoshop.
The fraud doesn’t stop at fake payslips. Other fraud picked up during the past year by the fraud fighting experts includes false passport images.
Others flagged up as suspicious on an application include salary declarations not matching up with bank statements.
And there may also be employer references from companies that don’t exist or doctored documents where different fonts are used.
Last year, Goodlord claimed that payslip fraud accounted for 58 per cent of all fraud cases detected, and that just one of these slipping through could cost the agent a lifetime landlord value of £10,000.
While referencing teams can be trained to spot inconsistencies in tenant applications, fraud can also be detected with the help of Open Banking and AI tools, which can help spot repeat offenders.
What happens if an application is fraudulent?
As well as blocking an application, any fraudulent information or documents provided by a prospective tenant is ‘logged internally for future use’ so any future incidents can be picked up quickly, according to Goodlord.
Details of tenants involved in confirmed fraud are also added to CIFAS, the national fraud database.
This could have serious implications for applicants if they try to apply for certain types of finance in the future.
Details of tenants involved in confirmed fraud are added to the national fraud database, which could have serious implications for applicants if they try to apply for finance in the future
Nishma Parekh, of Goodlord, said: ‘Fraud can come in many forms. In some instances, tenants who are desperate to secure a property think bumping up their salary will help seal the deal.
‘Given the current pressures on the housing market, it’s understandable as to why we’re seeing a rise in this type of fraud.
‘However, this is inadvisable as you could end up on the National Fraud Database, impacting future job prospects and other life events such as securing loans.
Given the current pressures on the housing market, it’s understandable as to why we’re seeing a rise in this type of fraud. However, this is inadvisable as you could end up on the National Fraud Database, impacting future job prospects and other life events such as securing loans
Nishma Parekh – Goodlord
‘And, of course, there is also a much darker side to fraud, such as criminals using false IDs to secure properties, or people who are looking to sign tenancies using forged documents.
‘As the tools used to commit fraud grow more sophisticated and personal information is increasingly digitised, it’s vital that landlords and agents can access the cutting-edge technology designed to fight back – ones that can protect them and ensure they can let their properties out in good faith.
‘Through integrations with payroll providers, HMRC, the fraud database and Open Banking, skilled teams and tech solutions are helping tackle fraud, making it increasingly hard for bad actors to game the system.’
It comes amid a sharp rise in rental values since the start of the pandemic.
Among the latest findings, Zoopla suggested that rents have risen 29 per cent since just before the start of the pandemic.
While the rate of growth in rental prices has eased during the past year, they are still significantly higher than four years ago, the property website said.
The average rent in Britain was £948 a month in January 2020, and has risen to £1,223 today, the property portal says.
> Are you a landlord that was a victim of rental fraud? Get in touch: [email protected]
