April 17, 2024

Chester Company Says “Fake Tenancy Applications QUADRUPLE In The Past Two Years”

HomeLet, the UK’s largest referencing firm and a leading name in the UK letting industry, alongside Pulford-based Let Alliance, have identified a significant increase in fraudulent tenancy applications, with the company now receiving nearly 200 per day.

The surge in fraudulent applications is not solely attributed to criminal behaviour but is exacerbated by market conditions.

Landlords are selling houses at record speeds because of rapidly increasing interest rates and stringent government policies. The resulting shortage in supply of rental housing is causing fierce competition for properties. Data shows there are over 20 applicants per rental, on average.

Consequently, this is driving rental prices to record highs. Coupled with the cost-of-living crisis, experts are calling this a dire situation for all involved in the industry.

Consequently, fraudulent activity is not only increasing through career criminals, who are cashing in on the chaos, but from people who would never have dared to commit fraud out of desperation to secure a property.

HomeLet and Let Alliance’s exclusive data reveals a fourfold increase in fraudulent applications over the past two years alone.

In parallel, with the rise of artificial intelligence and other software, fraud within the lettings industry has become more strategic, complex, and targeted. Making it a difficult time for landlords, letting agents and honest tenants.

The most common fraudulent document received by HomeLet and Let Alliance involves edited bank statements, primarily showing income inflation, mimicking employment, or concealing illegal income sources. Notably, 89% of failed applications in January 2024 were declined due to fraudulent bank statements.

In 2023, London, the South East, East of England, and Wales took the lead in fraudulent activities.

So far this year, HomeLet and Let Alliance have prevented landlords and letting agents from losing over £1.4m in average rent because of fraudulent applications, building on the £47 million the company has helped customers save in 2023.

To help combat fraud, and improve the market conditions for all involved, HomeLet and Let Alliance are launching VISTA, a revolutionary tenant referencing solution designed to detect and prevent fraudulent activities within the lettings industry and conduct fairer, more accurate affordability assessments.

One critical component of VISTA is the forensic assessment of electronic documents, capable of assessing creation dates, identifying edits, and understanding changes made to documents. The self-learning system also recognises visual alterations made to frequently received documents, for example branded bank statements.

While AI plays a significant role, HomeLet and Let Alliance emphasise the importance of human intervention to connect the dots between flagged fraudulent behaviour and reality.

On the launch, Andy Halstead, CEO of HomeLet and Let Alliance, said:

“There are no winners in the rental industry at the moment, and without drastic change it will be the same for the next few years. What the government fails to understand is the huge problems they have created for tenants, by making life difficult for landlords. Landlords are exiting the market in droves because of increasing mortgage rates and the stranglehold of new regulations. The lack of supply this creates means tenants are battling at least twenty other people to secure a home and paying record prices. When coupled with the cost-of-living crisis, it is a dire situation for all. As a result, we’re seeing fraudulent activity surging. Not only from career criminals, who are cashing in on the chaos, but from people who would never dare commit fraud out of desperation to secure a property.

“A change in government is unlikely to help. Decisions are being made based on winning votes, often without the knowledge required to fully understand the consequences of the decisions. What is obvious to professionals who support the property rental industry appears to escape the minds of those in power. It has never been more important for the industry to look for solutions that tackle the issues head on. And the ‘old’ way of completing references is simply not good enough for today’s and tomorrow’s market.

“A world class referencing and assessment service that guarantees the rental income for letting agents and their landlords is essential.

“That’s why we have developed VISTA. Our customers have spoken, and we have listened and acted. Our new advanced referencing process VISTA surpasses all referencing solutions today. The result of three years of research and development and an investment of over £3 million, VISTA will provide the highest protection for our agents and landlords in the face of the housing market crisis and rising fraudulent references.”

Rebecca Baker, Head of Customer Operations at HomeLet, said:

“Fraud is growing at exceptional rates in the lettings industry. Whilst we see many examples of people adopting a do-it-yourself approach with basic computer software, we’re receiving more intricate, complex examples of deception every day. From changing pay slip dates and employer details to hiding transactions and changing income amounts, the lengths people go to secure the property they want and, or make a profit from is quite incredible, but no longer surprising.

“To protect all those in the rental supply chain, we’ve combined data, technology, and people to detect even the most complex fraudulent behaviour. Advances in software and artificial intelligence are critical in detecting fraud, but in the same breath, without experts interpreting the technological advances and joining the dots, fraud would be even greater than it currently is.

“We’ve created an industry-first solution with VISTA and we’re at the forefront of protecting the letting industry for tenants, landlords and letting agents”.

Case Studies

Applicant X (Subletting)

Applicant X applied for a Kensington property, claiming to earn £120,000 as a brand consultant. VISTA detected significant changes in bank statements, revealing subletting activities. When cross checked by HomeLet’s expert referencing team, they identified over 20 payments hiding illegal subletting on platforms such as AirBnB.

Applicant Y (Source of Funds)

Applicant Y applied for a £2000pcm property, claiming to earn £28,000 as a sales assistant. VISTA’s metadata software revealed edited statements, when investigated by HomeLet’s expert referencing team, it was identified that the applicant was changing universal credit payments to appear as salary from a retail chain.

Notes to Editors

About HomeLet

Established over 30 years ago, HomeLet is the UK’s largest referencing firm and a leading name in the UK letting industry. The company provides fast, accurate and reliable tenant references to landlords and letting agents, helping them get the very best tenants for their properties and enabling tenants to secure the home they want. HomeLet conducts over 1,200 tenant references every day and partners with over 6,500 letting agents and landlords across the UK.

About Let Alliance

Pulford-based Let Alliance is known to be ‘the one stop shop’ for all property rental services, helping landlords to both create revenue and reduce workload. The company provides specialist services to support the private rental sector, offering market-leading referencing and insurance services as well as bespoke products for letting agents, tenants, and landlords.

About VISTA

In 2024, HomeLet launched VISTA, a ground-breaking, industry-first tenant referencing service designed to provide true, accurate affordability assessment of applicants, and mitigate fraud risk. VISTA is the result of an investment of over £3 million and three years of research and development combining HomeLet’s proprietary data from over 30 years in the industry with expertise from data specialists Experian.

Andy Halsted, CEO of HomeLet and Let Alliance:

“Through VISTA, we are about to revolutionise tenant referencing services in the UK. Our advanced referencing process surpasses all existing solutions, providing the highest protection for our agents and landlords in the face of the housing market crisis and rising fraudulent references. The VISTA journey for tenant applicants is simple, and the outcomes for Letting Agents are instant, accurate, and give our customers a competitive edge. For the first time in the UK, tenant applicants will go through an affordability assessment that is based on much more than earnings alone”.