A rise in tenant fraud and unchecked fraudulent rental applications are having a devastating impact on landlords, warns tenant due diligence and guarantee firm Homeppl.

Rising unemployment and affordability among renters are adding to the problem, according to Homeppl, which points to a 71% increase in the number of fraudulent applications between the second half of 2020 and the first half of 2021 – meaning that one in 50 rental applications are now fraudulent, rising to one in 20 in London.

Its report Are you prepared for an increase in tenancy fraud? finds that legal costs and lost rent mean each fraudulent tenant costs more than £30,000 while the tenant themselves are at very little risk.

CEO and founder Alexander Siedes says: “The consequences for landlords of inadvertently approving a fraudulent application are dire – up to £30,000 in lost income and legal costs and fines of up to £3,000 for renting to a tenant with no legal right to rent in the UK.

“In a worst-case scenario, scammers will lose their holding deposit, but there is little to de-incentivise them from making further fraudulent applications.”

He adds that the fact there are no consequences for fraudulent tenants means they will simply keep trying and, due to the sophistication of most fraudulent applications, many will succeed.

“When you add to that the softening of eviction regulations which means landlords have less power to evict fraudulent tenants, increasingly, scammers are renting properties with the intention of illegally subletting them to make easy money, at a huge cost and risk to the landlord.”

Fraudsters try to trick agents and landlords with a range of strategies, including using fake ID, employer references, or references from former landlords.

Read more: How to deal with rogue or criminal tenants.


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