When you think of fraud, property fraud at the expense of landlords is not what comes to mind for most, yet according to the latest research, property fraud is by far the most common occurrence of fraud dealt with by local authorities across the UK.
Scammers are often able to take advantage of the fact that property titles in England and Wales are easily accessible online. These personal details can be used to commit property fraud. One common scam is to set up a mortgage using the victim’s name and personal details, but with the funds being channelled into the fraudster’s bank account.
Research by ABC Finance found that between 2005 and 2019, 678 property fraud causes were reported, totaling £73.3 million in pay-outs. Whilst the quantity of property fraud occurrences might be relatively lower than other scams, the average value of property fraud far outweighs any other, coming in at an average of £107,669 per property fraud pay out.
How can landlords protect themselves against the scammers?
Set up by the HM Land Registry, the Property Alert Service is a free monitoring service that alerts homeowners and landlords when a registered property could be at risk of fraud. Whilst the Property Alert Service won’t necessarily prevent fraud from taking place, it does notify users of the scheme of suspicious behaviour, helping to provide a safeguard and an early warning that can help to stop fraud from taking place.
Currently, only about a quarter of a million of Britain’s homes are registered with the Land Registry’s Property Alert Service, out of a total of 29 million homes across the country. As the level of property fraud increases, the Land Registry is encouraging more people to register for this free service.
How does the Property Alert Service work?
Users of the scheme are notified when a significant activity is carried out on their registered property. An example of a significant activity is a local authority search takes place on a property, which is usually a sign of a conveyancer preparing a property for sale. Should the property owner not recognise the activity, it could be a sign that the property is at risk of fraudulent activity taking place.
You do not need to own a property to set up an alert using the service, and multiple people can monitor the same property. This provides opportunities to monitor the property of a relative, to help protect them from fraud. However, using the scheme you can only monitor up to 10 properties.
For flats and apartments, often two titles can be registered. Freehold blocks of flats are often owned by companies, whilst an individual often owns the individual leasehold for the flat. When using the Property Alert Service for individual flats or apartments, users should choose the leasehold title.
How can a landlord sign up for the Property Alert Service?
The Property Alert Service is managed by the HM Land Registry, an official government service. To sign up for the service, homeowners and landlords should visit the official Property Alert website here. If you have not previously used the service before, you will need to create an account. Users will need a valid email address and the postcode or title number of the property that is to be monitored.
Which type of property is most at risk of property fraud?
Similar to a domestic burglar, property fraudsters look for easy targets where they maximise their chances of not being caught. With this in mind, there are six main types of properties that are appealing to the fraudsters.
Rental properties are appealing to fraudsters as typically the owner does not live at the address, so might not receive the relevant paperwork. This is especially true for properties that have only one contact address with the Land Registry, the property itself. If the owner’s current residence does not receive the paperwork for the rental property, the property is an easy target for a fraudster.
Vacant properties can be caused by a variety of factors, whether it be the past tenants moving out, the owner going into care, or passing away. All of these create an opportunity for a fraudster to profit from a lack of hands-on ownership of the property on a day to day basis.
Overseas Owner Properties
Whether it be the family home for expats living in the sun abroad or overseas investors looking to benefit from the UK property market, overseas owners can find it more difficult to manage their UK property, creating an advantage for scammers with nefarious intentions.
Properties without mortgages are not subject to additional lender checks when major changes are made, such as transferring the deeds, so mortgage-free properties can be more vulnerable to property fraud.
High value properties
As with all crimes, fraudsters are naturally attracted to more valuable properties.
If a property hasn’t been sold or mortgaged since 1990, there is a chance that the property isn’t registered with the Land Registry at all, yet alone for the Property Alert Service.
It is understandable that landlords and homeowners are concerned about the rising risk that fraudsters pose to our most valuable assets, our homes. We are always available to advise and help, as well as offering peace of mind through our fully managed landlord services that ensure you and your tenants are protected. Contact us with any landlord related questions you might have, we would love to help.