I’ve recently been reading up about how there has been a 10% increase in fraudulent tenancy applications which are increasingly leaving landlords out of pocket. As if it wasn’t challenging enough being a landlord right..!
So, what’s the key facts to this? Well, basically it looks like there has been a noticeable spike in notified incidents over the past 18 months, within the past 12 months alone there have been over 50,000 fraudulent suspicious applications flagged.
With UK Rents increasing at their fastest annual rate for over 16 years, it’s no surprise that the industry is under strain. For example, UK rents have, on average, increased by 19% over the past two years.
Interestingly, as you look at the detail, Chatham has come second across the whole of the UK when it comes to an annual rent increase!
So, what’s happening and how do you spot a fraudulent tenancy application?
The first point to look at is rental demand, which continues to vastly outstrip supply. With an estimated 46,000 rental properties disappearing from the market this year, the Government’s war on landlords is certainly piling fuel on the challenging situation!
I know from the properties the Home Share team manage for landlords that there is a huge demand still and we continue to be completely inundated with applications for every single room and single let we put on the market.
So, with the vast numbers of applications to sift through how can we spot a fraudulent one? This is one of the big reasons that it’s crucial to have a robust referencing process and experience in vetting tenants at viewings.
Here’s just a few of the different ways applicants may try to scam you:
- Using photo editing software to alter documents such as credit reports
- Use fake photos and stolen ID
- Use friends or family to pose as current or former employers or as personal references
- Choosing not to tell you information that you are legally required to have
- Falsely stating their income
- Look out for a situation where all documents forwarded are new or created recently (such as passports and driver’s licenses)
- The potential tenant has no proof of employment or self-employed status
- There is no social media visibility and you are unable to find their presence on publicly accessible websites
- Documents presented come from another country and can’t be verified
- The applicant cannot (or will not) meet in person, only via video call
- The potential tenant would like to move in right away
- Only paper payslips that seem odd or low quality for a credible company are presented
How you spot a fraudulent application can be challenging and whilst things such as a credit check and references tend to cut out most of the risk, some risk still remains. This, as well as getting the compliance right, is one of the many reasons it’s well worth using a professional managing agent to look after your property.
One way to limit potential fraudulent applications is by advertising in places such as Rightmove, Zoopla and SpareRoom. I would certainly recommend avoiding places such as Facebook and Gumtree when it comes to advertising for tenants.
My advice is to always be cautious and if you suspect something is not quite right, it’s worth being cautious and if you have other options moving onto them as I’m sure you will agree that having no tenant is better than having a bad tenant!
I’d be keen to hear any experiences you may have when it comes to finding quality tenants! The best way to get in touch is via LinkedIn.