Rising fraud in the lettings industry: why we need faster and more accurate referencing solutions

Fraud in the lettings industry is reaching unprecedented heights. Now, more than ever, there is a need for a revolution in tenant referencing and affordability assessments to help protect letting agents, landlords and honest tenants.

In the past year alone, fraud within the lettings industry has surged by at least one-third and the upwards trend is showing no signs of slowing down. This increase isn't solely attributable to an increase in criminal behaviour; rather, it's closely intertwined with the present market conditions. 

As we navigate a cost-of-living crisis, surging mortgage rates, rising utility costs and high inflation, the demand for rental properties continues to climb with data showing upwards of 20 applicants per property. These challenges have put immense financial strain on individuals and households.  

Tackle this challenge

It's a perfect storm that not only invites fraudulent behaviour but also entices a growing number of individuals, who would never normally dream of bending the rules, to resort to deceptive practices to secure housing.  For example, counterfeit credit files and advanced document manipulation.  

The repercussions of fraudulent tenancies reverberate throughout the industry, impacting letting agents, landlords, and honest tenants. Fraudulent applications can result in significant financial losses and legal complexities, leave honest and vulnerable tenants without housing, and cause mental and physical distress to those impacted. The referencing process is a linchpin in the security and success of the entire industry. 

To tackle this challenge, letting agents need to be vigilant and proactive. Red flags should be raised when applicants exhibit unusual behaviour, such as attempting to move swiftly, offering substantial upfront rental payments, or showing reluctance to undergo the referencing process. Some potential tenants may attempt to mask their financial issues or overstate their income, posing a significant risk of rent arrears or illegal subletting.  

In parallel, businesses within the letting industry need to deliver innovative, efficient, and trustworthy products and solutions that can effectively safeguard the interests of letting agents, landlords, and tenants. More specifically, to overcome this critical issue, the referencing process must be revolutionised balancing a blend of technology, data points and the expert insight of highly trained professionals.

Soon, HomeLet and Let Alliance, the UK’s largest tenant referencing, and specialist lettings insurance company, will be launching ‘VISTA’ – an innovative, fast, and accurate tenant referencing service that eliminates fraud by using leading fraud detection technology and providing a true affordability assessment of applicants.

VISTA uses the same data as banks, credit card companies and mortgage companies with 70% of reference applications being completed in real time. 

A result of a strategic partnership with data analytics specialist Experian and HomeLet and Let Alliance, VISTA revolutionises tenant referencing by harnessing the power of data, technology, and human expertise to deliver a fully optimised tenant referencing solution, offering the highest level of protection for letting agents and landlords.