Property scams are on the rise across the UK, with figures from the Land Registry showing that the value of property-related fraud has increased from just £7.2 million in 2019 to an alarmingly high £24.9 million in 2019.
Part of the reason for this increase in fraud is that modern property scams, many of which have been around for decades, are becoming increasingly more sophisticated.
Whether you’re selling your home, renting it out to tenants or shopping around for a new house, apartment or other piece of real estate, it’s important to be aware of what these scams are and how they work to avoid becoming a victim of property fraud.
Below, we’ve listed three of the most common property scams, as well as the proven steps that you can take to avoid being targeted.
Misleading “We Buy Any House” Offers
If you’ve browsed property websites recently, or just looked through the ads in your newspaper, you might have come across advertisements claiming to purchase your house in a fast, all-cash sale.
While there are plenty of responsible, professional home-buying businesses out there, there are also some businesses that prey on homeowners.
Unlike ethical we buy any house companies, this scam involves a middleman approaching you as a cash buyer. The buyer will often provide an inaccurate valuation for your property to lure you in, before a lower offer is given closer to sale time.
These companies often use complicated legal language to hide the fact that the seller may not receive all of the original sales price. For example, a man in Flintshire received only £68,000 on a £165,000 sale through one of these companies.
To avoid these scams, be selective when you’re approached by a potential buyer. Look at their background and, if they’re part of a company, their reputation. Good buyers thrive on offering a transparent, professional image, while fraudsters often conceal the way their business works.
Fraudsters Posing as House Sellers
This common scam targets the buyer of a home, rather than the seller. To pull it off, a fraudster will pose as the owner of a home in order to trick the Land Registry into changing the property’s details.
Then, the fraudster gains control of any mortgage payments made on the property, letting them direct them into their own account. Done discretely, the person paying the mortgage often never becomes aware that their money is being stolen.
The easiest way to avoid this scam is to use Property Alert, which is offered as a service by the Land Registry to prevent form of property fraud.
Tenants “Selling” a Rental Property
Another common scam involves tenants posing as the owner of the property they live in, then “selling” the property to an unaware buyer.
Known as “property hijacking”, the fraudsters will generally steal the property owner’s identity before executing this scam. Then, with the owner’s identity in their control, they’ll fraudulently sell the property to a buyer without the property’s real owner ever knowing about it.
Reversing this process can be a costly affair, meaning that even if the fraud isn’t successful in extracting money from the victim, you may still face costs as a property owner.
Like the above scam, the easiest way to avoid this fraud is to ensure you have Land Registry provide alerts for your property. The government also provides a list of steps that you can take to limit your risk of being targeted by fraudsters if you own rental or investment properties.
