Latest figures from Barbon, the UK’s biggest tenant referencing company which includes Rent4sure, HomeLet, and Let Alliance, reveal the extent to which tenancy application fraud is on the rise.
As the country’s leading tenant referencing partner to professional letting agents, the group completes a million tenant references a year.
Barbon CEO Andy Halstead warned that application fraud has spiked over the past 18 months, with fraudsters becoming smarter at a time when the UK is facing the biggest income squeeze in nearly 50 years.
“The volume of alerts on applications is continually increasing and in the last 12 months alone we’ve flagged over 50,000 suspicious applications,” he said.
“As demand for property soars and rental prices rise, tenancy fraud is becoming more profitable and many more chancers want to get in on the act. They’ll use any opportunity and we’re seeing increasingly sophisticated methods being used to try to obtain access to properties to support criminal activity or sublet illegally.”
The biggest risk to customers is fraud, but with a legacy going back nearly 3 decades and a cohort of around 150 experienced referencing specialists across Barbon’s three brands, there’s little that Halstead and his teams can’t handle.
Knowledge and data is shared across the group, significantly reducing the chances of a fraudulent application getting through. Hundreds of applications are flagged every single month, whether that’s for a relatively small issue needing a review and further checks, or something more serious that requires in-depth analysis to resolve.
Each reference that Rent4sure’s specialist team marks as fraudulent or suspicious saves a letting agency and their landlord the cost, stress, and hassle that comes with selecting unsuitable applicants.
HomeLet’s latest Rental Index data for April 2022 shows that the average UK rent for a new tenancy has risen to £1,091 per calendar month, up by 9.5% from last year.
Rising rents and the cost of living crisis are just two of the factors helping to increase the pressure on household budgets, said Halstead.
“Unfortunately, this could mean that some tenants present a higher risk. Add rising fraud data into the mix and the situation becomes a perfect storm.”
Typical red flags agents should be aware of when approached about a tenancy include:
• looking to move very quickly
• offering large amounts of rental payments upfront
• trying to avoid going through the referencing process
Some potential tenants may attempt to cover up issues such as County Court Judgements or adverse credit history. They may try to over-inflate their income, or be intending to sublet. Potentially, these are people who won’t necessarily be able to afford the property and are at a higher risk of running into rent arrears, so rigorous scrutiny is essential in preventing fraudulent applications getting through.
Halstead is urging agents to help mitigate the risks and protect their landlords by using high quality, trusted referencing checks from a professional partner such as Rent4sure.
“Referencing tenants is the first line of defence and our experience, expertise and procedures help keep customers safe.
“We’re continually optimising our checks, which mix technology with the most experienced team in the market. We call it ‘Intelligent Referencing’ for a reason.”
With a number of complex individual parts making up the referencing process, it’s essential to combine the right blend of technology and datapoints alongside expert input from highly trained professionals. It’s a tried and tested hybrid approach, developed through nearly 30 years’ experience within the lettings industry.
Never content to stand still, CEO Andy Halstead ensures that the process evolves as it needs to: “It’s amazing the lengths some people go to commit application fraud but as the fraudsters try different things and get smarter, or at least think they do, we’re here fine-tuning our methods exactly as we need to so we can keep on protecting our customers.”
To find out more about Rent4sure’s quality checks and in-depth tenant screening, contact us today on 0330 088 3774 or click here.