140% increase in tenancy application fraud

 As if landlords and agents didnt have enough to worry about, recent data has shown a significant increase in rental market competition is driving a rise in tenancy application fraud.

An analysis by tenant referencing firm Goodlord revealed a 140% increase in tenancy application fraud between 2022 and 2023.

The most common method involves manipulating payslips, either by inflating income or altering the source entirely.

Goodlord analysed over 300,000 applications from each year, showing an increase from 1.2 cases of fraud per 1,000 applications in 2022 to 2.9 cases per 1,000 in 2023.

Nishma Parekh, Goodlord’s head of referencing, stated, "Fraud can take many forms. Some tenants, desperate to secure a property, believe inflating their salary will help.

Given the current pressures on the housing market, it's understandable why we're seeing a rise in this type of fraud."

She added, "However, this approach is inadvisable as it could lead to being listed in the National Fraud Database, impacting future job prospects and other significant life events like securing loans."

The increase in digitalisation also brings new challenges, with criminals using increasingly sophisticated methods, including fake IDs and forged documents to rent a home.

To combat this growing threat, Goodlord advocates for robust referencing practices.

The firm advises landlords and agents to utilise technology such as Open Banking and AI-powered solutions to detect inconsistencies and prevent fraud attempts.

Investing in skilled referencing teams trained to identify red flags in tenant applications is also crucial.

This highlights the  "darker side" to tenant fraud, with criminals using false IDs to secure properties or applicants submitting forged documents.

As the tools for committing fraud become more sophisticated and personal information is increasingly digitised, it's vital that landlords and agents have access to cutting-edge technology designed to combat fraud, ensuring they can let their properties in good faith."

Collaborations with entities like HMRC, payroll providers, and the fraud database, along with Open Banking, enable experts to tackle tenant fraud, making it difficult for fraudsters to exploit the system.

It is more important than ever for landlords and agents to ensure comprehensive referencing is carried out and not to cut costs or corners with minimal checks in the haste to minimise voids and limit short term losses.

These short coming could adult lead to a very costly ending