Fraud pilot investigation launched into Help to Buy loans

It's emerged that Homes England and HMRC have explored possible fraud within the Help to Buy Equity Loan Scheme.

This formed part of a wider range of data agreements allowing the taxman to conduct fraud pilots on Government schemes such as Help to Buy but also the more recent Bounce Back Loan support initiative.

Under the Help to Buy fraud pilot, back on 2018, Homes England provided a sample of 3,854 Help to Buy application records to HMRC as a one-off exercise. 

The investigations checked that applicants followed rules such as not borrowing in excess of 4.5 times their household income and not owning any other residential properties at the time of purchase.

An extract from the Data Usage Agreement in the pilot reads: "This pilot will help to identify instances of fraud by mis-declaration relating to the over-inflation of household income and fraud by omission relating to the failure to adequately declare the extent of existing property ownership.

“In instances where an applicant has over-inflated their household income, Homes England would like to further explore economic circumstance. 

“This will help them to understand the extent to which the applicant has placed themselves in a position of financial hardship by accruing additional debt from the Government, and any risks that Homes England are subsequently exposed to (for example, in the event of debt recovery.”