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Why is tenancy fraud on the rise?

More and more people are committing tenancy fraud and it’s having a massive impact on the industry

As a lettings agency, you probably know already that tenancy fraud has been on the up since 2019.

This trend was impacted by the Tenant Fee Act 2019, a regulation which states that lettings agencies can no longer charge tenants certain fees to rent. So, individuals can now make fraudulent applications to rent properties with minimal risk, because they are unlikely to lose out financially if they are rejected.


On top of this, the coronavirus pandemic led to a further increase in fraud, with many UK citizens and residents finding themselves in challenging financial positions. At Homeppl we’ve seen tenancy fraud increase by 71% between the second half of 2020 and the first half of 2021.

Even with the end of lockdown and restrictions, it’s likely that this trend will continue for some time due to the long-term economic impact of Covid-19.                                   


We believe that there are three factors currently contributing to increased tenancy fraud: 

  1. Job losses
    Many people are simply not making the money they need at the moment, and so are not honest in their tenancy applications.

  2. Softening of eviction regulation.
    Scammers are aware that landlords currently have less power to evict fraudulent tenants. Accordingly, many are renting properties with the intention of illegally subletting them to make easy money.

  3. Lack of penalty when caught.
    In a worst-case scenario, scammers will lose their holding deposit, but there’s little to de-incentivise them from making further fraudulent applications.


All this has big consequences for landlords…

Many landlords experienced financial difficulties as a result of the pandemic. In fact, 56% of UK landlords reported a loss in rental income in 2020.

However, fraudulent tenants represent an even greater risk during this difficult time. They frequently become non-paying tenants who refuse to move out until the landlord evicts them. And with the resulting legal costs and lost revenue, problem tenants like these cost landlords an average of £30,000.

So, how do you stop tenancy fraud? Well, download our Tenancy Fraud Guide to find out.

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