As a direct result of the pandemic, there has been a sharp increase in fraudulent rental applications and landlords are being warned to be on the lookout.
As many as 11% of renters are now unemployed, which is double the UK unemployment rate of 4.8%. This has caused an estimated 840,000 tenants to build up rent arrears.
This bears a significant impact on private landlords, with 56% losing income and a further 2.2% with Buy to Let mortgages in arrears themselves.
Our Rent Protect Pro product has helped give many landlords peace of mind in these trying times. This increase in unemployment, however, not only poses a risk to income as there has also been a sharp uplift in fraudulent applications. Homeppl reports that there was a shocking 71% increase in fraudulent applicants between the second half of 2020 and the first half of 2021.
That means that as many as 1 in 50 applications could now be fraudulent!
These applications could be from those without a right to rent within England, those lying about their employment status or income, or even from scammers looking to sublet the property to make quick money.
This adds another level of risk to landlords as they now not only have to worry about a lack of income but could be facing a bill of more than £30,000 when legal costs and fines for housing a fraudulent tenant are factored in.
In these circumstances, the tenant is actually at very little risk – losing their holding deposit being the biggest. This is a small cost to pay and unlikely to prevent future attempts to defraud further landlords. With the absence of significant consequences, scammers will only keep trying.
Alongside this, landlords are now facing longer waits to evict fraudulent tenants so it has perhaps never been more important for landlords to protect themselves. Having a trusted, experienced agent in your corner could make all the difference.
Here at Pittis we carry out thorough background checks on applicants, including credit scores, previous landlord references, employer or accountant references and Open Banking checks (where permitted) to give our landlords complete peace of mind.
Find out more about the benefits of working with a property management agent here
* All stats by NRLA