There has been a rise in the number of fraudulent rental applications based on the latest research by lettings and estate agent, Benham and Reeves. Jumping from an average of six per month in 2018 to 13 in the current year, there has been an increase of 117% fraudulent letting applications per month. The reason for this is mostly for unlawful activities where the fake applicants and would be tenants would sub-let or rent the property on a short term basis to anyone interested for a much, much higher price and then just disappear without paying the rent, taking anything and everything that they can from the property.Or worse, use the dwelling as a brothel or a drug den where the place ends up being damaged.
Significant Risks
The financial losses and risks can be quite significant to property owners, especially with the court system not offering much in terms of evicting errant tenants. Also, the recent enactment of the Tenant Fee Ban where letting agents can no longer charge prospective tenants for the reference checks raises the possibility of more fraudulent applications because it won’t cost the applicant anything in the event that they fail their reference check. In fact, the number of fraudulent applicants jumped to 16 from June this year after the declaration of the Tenant Fee Act 2019.
But the use of false bank statements aren’t the only cause of worry from the fraudulent activity, according to Benham and Reeves, there has also been an increase in the use of fake passports, from five cases in 2018 to 11 cases on the first five months of the current year.
Generation Rent
The director of Benham and Reeves, Marc von Grundherr explains that the increase of fraudulent applications is a big cause of apprehension “for a rental market that is already straining under the current requirements of a Generation Rent.” Now this is where the importance of using legitimate referencing agencies, where the people are trained to spot fake documents, come into play. However, most referencing companies only conduct superficial checks, not even bothering to ask for proof of address or IDs, thus, raising the probability of letting a fake applicant through.
The rise in the number of fraudulent letting applicants will continue to grow, especially with the growing sophistication of producing fake documents, unless the appropriate checks are undertaken and done by legitimate referencing companies. Vigilance in the matter is called for in order to stop the problem
