Hundreds of would-be tenants every day are doctoring bank statements or fabricating job histories to find homes in an overheated rental market, the UK’s largest tenant referencing agency said.
HomeLet, which vets prospective renters on behalf of landlords, said overworked staff had reported a fourfold increase in fraudulent tenancy applications over the past two years. Ninety per cent of the doctored documents it found were edited bank statements that exaggerated income; the rest were found to have a fake job or criminal record.
Tenants looking for somewhere to rent, particularly in London and the southeast, have faced an unprecedented supply crisis in recent years as landlords either sharply raised rents or sold properties because of rising mortgage rates and higher taxes. The shortage has been compounded by a return to cities after the pandemic and by the fact that fewer can afford to buy a home.
Figures by Hello Neighbour, a digital platform for landlords, show that there are 50 viewing requests on average for every advertised property in London, although this was a fall from 93 in July.
HomeLet said it believed that a large number of those falsifying applications were not career criminals but “people who would never have dared to commit fraud but did so out of desperation”.
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It said that tenants using artificial intelligence made it more challenging to detect falsified documents. “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,” Rebecca Baker, head of customer operations at HomeLet, said. “From changing pay slip dates and employer details to hiding transactions and changing income amounts, the lengths people go to to secure the property they want … is incredible but no longer surprising.”
She gave as an example one would-be tenant who had applied for a £2,000-a-month property, claiming to earn £28,000 as a sales assistant. HomeLet’s software identified that bank statements had been edited so that the applicant’s universal credit payments were disguised as her salary.
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HomeLet said it used a tenant-referencing technology called Vista to detect and prevent fraud. The system uses “forensic assessment of electronic documents and a self-learning system to recognise visual alterations”, it said.
Hello Neighbour, meanwhile, says average rents being charged by landlords on its register are up 12.2 per cent year-on-year, from £1,478 in January last year to £1,658 last month in the UK as a whole. In London, however, the figure is considerably higher. In Haringey, for example, the average rent was up 18.9 per cent, from £2,071 to £2,462.
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In an indication that the crisis might be easing, though, it said that it had detected a gradual reduction in the number of landlords offering properties at more than 10 per cent above market value.
Richard Jenkins, co-founder of Hello Neighbour, said evidence suggested that tenants may have reached an “affordability ceiling” and that landlords would no longer have this in their armoury. “Over the last two years, landlords may have been able to offset higher costs by increasing rents. Now, if landlords want to make sure they can let properties in a timely fashion, without incurring a void period, they have to think carefully about rental prices.”
