If you're looking for your first home or taking out your first mortgage, you'll need to be especially vigilant for property scams, as you are automatically that little bit more vulnerable through a lack of experience in property transactions.
Property scams are on the rise in the UK, with the number of cases having doubled over the last 10 years. In fact, property fraud accounts for the highest volume of fraud claims recorded by the Land Registry* – a staggering 71 per cent of all claims, with a value of £216 million. Fraud cases in the property sales segment of the market alone have gone up in value terms from £7 million in 2013 to £25 million in 2017.
So, what are the most common types of property fraud that you should be aware of? The most notorious type of scam is fraudsters posing as house sellers. They do this by asking the Land Registry to change the property details online, so that the fraudster gains control of the mortgage payments, pocketing them into their own account. The solution to this is asking that the seller register for the Land Registry fraud alert service, so that no one can impersonate them online.
Other common fraud types include 'Friday afternoon scams' where the fraudster hacks into your solicitor's email account and asks that the money be paid into a different account; property auction scams where the home turns out to be not as described, 'free land' scams that advertise land as free simply because the owner has passed away, and holiday home scams where a holiday home is advertised as permanent home.
What all of these fraud types have in common is the way they take advantage of the increasingly virtual nature of looking for (and sometimes even paying for) a property. We all browse the internet for housing, and everyone communicates via email, at least initially.
Our advice: whatever the property you're buying – or land, for that matter – you must always ask to see the deeds to the property with your own eyes. And – never, ever give your bank details over email. Ask to complete the transaction in person, at your solicitor's office. If bank details suddenly change halfway through the completion process, be very wary – again, ask to check everything with your solicitor in person.
The same rationale applies to renting. Can't meet the landlord because she/he lives abroad? Alarm bells should be ringing. Asked to give the deposit money in cash or over email? Again, walk away. Pressured to pay the deposit asap without signing contracts? You get the drift. If you feel that something isn't right, or if the property is empty, it's always better to be on the safe side. Read our guide to renting for more advice.
*Data obtained through a Freedom of Information request by ABC Finance