In this guest piece, Colum Smith, a property expert at law firm Taylor Rose MW, sets out why speedier transactions could actually be more susceptible to fraudsters.
As anyone who has ever gone through the process will know, moving home isn’t for the faint-hearted.
It can be a rollercoaster and it's obvious why selling up is therefore widely quoted as one of the most stressful things you will go through.
That’s why many people will have seen the news about the rapid speed with which property deals are not being concluded with glee. According to new data from Rightmove properties are selling faster than ever - either at or above the asking price.
Experts at the property giant say it now takes an average of just 33 days before a property is marked as sold subject to contract on Rightmove. Two years ago the length of time was 67 days.
Please forgive me if I am not among those jumping for joy at this news. Yes, it’s great that the length of time people now have to wait is often being reduced to a matter of weeks rather than months. But this is creating massive downward pressure: not least on conveyancing teams and property lawyers who need to make sure absolutely every box is ticked before a property changes hands.
Right now the level of demand within the housing market remains at record levels and property solicitors are working at breakneck speed, often seven-days-a-week to get deals done.
Generally, standards across the industry remain exceptionally high but, as in any other service, when resources are stretched to breaking point, mistakes can and do creep in.
And nobody knows this more than fraudsters who are continuing to cash in on the property market in record numbers.
For the con-artists who are coming up with more and more sophisticated ways of defrauding those moving home, these lightning-fast turnaround times will come as music to their ears.
They will see it as an opportunity to exploit weaknesses within a service which is already stretched and falling victim to cons all the time.
That’s why I think this is an important moment for anybody involved in a speedy transaction - be they the buyer, seller or solicitor, to stop, take a breath and make sure everything they are doing is following procedure.
The most important step you can take is to safeguard yourself against email hacking. Nowadays, especially post Covid, pretty much the entire house sale process will take place online. It’s possible you will never actually speak to a solicitor, let alone see them.
That’s why email hacking is a method preferred by fraudsters. Crooks aim to intercept emails between a person in the process of buying a property and that person’s conveyancing solicitor. The purpose of intercepting the emails is to alter bank details referred to in the correspondence, so that funds are transferred by the buyer to the fraudster’s account.
Protect yourself by cross checking any bank details sent to you via email with any sent in the post. If the bank details differ, ring your solicitor to query them.
If you are told via email that bank details have changed, query this with your solicitor.
Agree terms with your solicitor at the start of the conveyancing process as to how changes in bank details will occur. In person is ideal. Transfer a small sum and ensure the solicitors have got the money. Ensure you're talking to your solicitors and not the fraudsters.
Do not use public WiFi when exchanging emails regarding your property purchase; public WiFi can be easier to hack into.
Use strong passwords on your email accounts and ensure you have anti-virus protection on your devices.
Sweep for your data compromised passwords and do not use the same or similar passwords.
If you rent out a property or own a holiday home make sure it has your up-to-date correspondence address, not the address of the property. You can register up to 10 addresses with the Land Registry including an email address.
Whether you live or do not live at the property you can register a ‘restriction’ against the title. This means that no sale or re-mortgage of the property is to be registered without a certificate signed by a conveyancer, who is satisfied that the person who executed the document is the actual owner. There is no fee for this if you do not live in the property, but if you live in the property the registration fee will cost £40. Obtaining a restriction against title might be something worth considering while you are going through the conveyancing process.
Sign up to the Land Registry’s property alert service, too.
You will receive an email if anyone attempts to deal with your property title. Use the following link https://propertyalert.landregistry.gov.uk/propertyalert/accountcreation/.
Be alert too if you receive any correspondence purporting to be from an agent or a solicitor relating to the sale of your property. Do not assume it is simply a mistake and ignore it. Contact the sender to find out why they are writing to you .
Another more sophisticated property fraud involves criminals stealing your identity and selling your home. The fraud, often organised by criminal networks, involves duping solicitors, estate agents and the Land Registry.
Once they have obtained your identity, they claim the titles to your home and change ownership to their name, enabling them to take out loans secured against the property or even sell it.
Last year the Land Registry revealed it paid out £3.5million in compensation for fraud and inaccuracies within its register between July 2019 and July 2020, but these figures are the tip of the iceberg and I fear there are many, many more cases which go unreported.
*Colum Smith is a property expert with Taylor Rose MW