Preventing Property Fraud: What you need to know
Protect your most valuable assets, with our helpful guide
Introduction:
Property fraud is one of the fastest-growing types of fraud in the UK. As we increasingly rely on digital transactions, it’s essential to stay vigilant about protecting our homes and properties from fraudsters who can exploit weak points in property ownership records. It can be shocking to realise that someone could steal a home or land by manipulating records at the Land Registry, but it’s a real risk that all property owners should be aware of. Fortunately, there are steps you can take to safeguard your property.
In this article, we’ll cover what property fraud is, the warning signs, how it typically happens, and the actions you can take to prevent it.
What is Property Fraud?
Property fraud happens when fraudsters change ownership records to sell or mortgage a property without the real owner’s knowledge. They may forge documents, impersonate the owner, or exploit weaknesses in the property registration system to take control of someone else’s property. Imagine you own a property outright, perhaps a house you’ve inherited or a rental property that doesn’t see much day-to-day attention. Now, what if you only found out that fraudsters had sold or remortgaged it in your name when it was too late? In some cases, property fraud victims lose hundreds of thousands of pounds because someone falsely claims ownership of their home and secures a hefty mortgage against it. This sort of fraud can happen to anyone, but certain properties are more at risk. These include:- Empty or unoccupied properties: This can include second homes, buy-to-let properties, or homes where owners are temporarily absent.
- Mortgage-free properties: If there is no mortgage on the property, fraudsters may find it easier to alter ownership records without detection.
- Properties without recent Land Registry activity: Properties that haven’t been sold or mortgaged in years can be targets because the owners are less likely to monitor changes.
How Does Property Fraud Work?
In the UK, most properties are registered with HM Land Registry, which keeps track of ownership and mortgages for properties across England and Wales. Fraudsters target properties by falsifying documents, forging signatures, or even using stolen personal details to alter records. Here’s how property fraud generally unfolds:- Identity theft: Fraudsters may use stolen personal information (such as names, addresses, and signatures) to pose as the real property owner.
- Forged documents: They create fake documents or modify existing ones, perhaps pretending to sell the property or remortgage it.
- Altering Land Registry records: They submit these falsified documents to the Land Registry, effectively changing the ownership record in their favour. In some cases, the fraudster might then quickly sell the property or secure a mortgage against it.
- Quick transaction: Once ownership records are changed, fraudsters often try to complete the sale or remortgage the property as quickly as possible before the true owner notices.
Signs That You May Be a Victim of Property Fraud
The sooner you identify suspicious activity, the better your chances of preventing it. Here are some red flags that might indicate property fraud:- Unusual correspondence: Receiving unexpected letters, bills, or mortgage statements for your property is a strong indicator that someone may be misusing your information.
- Missing letters or bills: If you’re not receiving bills, letters, or council tax statements for a property you own, this could mean someone has changed the correspondence address.
- Unexplained visitors or activity: If people show up claiming to have purchased your property or if you notice estate agents marketing your property without your consent, you may have fallen victim to property fraud.
Tips for Preventing Property Fraud
Property fraud can feel scary, but you can take effective steps to protect your property and prevent fraudsters from succeeding. Let’s explore the essential steps:1. Register Your Property with HM Land Registry
If you own a property that hasn’t been registered with HM Land Registry, get it registered. Registration makes it much more difficult for fraudsters to manipulate the records. Registered properties are easier to monitor, and there is a clear record of ownership that can help prevent fraudulent transfers.2. Sign Up for Property Alerts
HM Land Registry offers a free property alert service. By signing up, you’ll receive an email notification anytime there is a change to the records for your property. This alert system doesn’t prevent fraud, but it allows you to act quickly if any unauthorised activity is detected. The service is available for any property, including those you own or may have an interest in, such as a rental property or a property you’ve inherited.3. Apply for a Restriction on Your Property
A restriction is a specific safeguard you can place on your property record to prevent transactions without your permission. For example, you could apply a restriction that requires a solicitor or conveyancer to confirm your identity before any sale or mortgage is completed. This adds an extra layer of security, ensuring that no changes are made to your property record without additional scrutiny. To apply, you’ll need to fill out an RX1 form and send it to HM Land Registry. In some cases, the Land Registry offers this restriction for free if you don’t live at the property.4. Keep Your Address Up-to-Date with the Land Registry
Make sure that the Land Registry has your current address. If you own multiple properties or a property you don’t live in, such as a holiday home, you can add up to three addresses, including email addresses and an overseas address. By keeping your contact information up-to-date, you’ll receive any important notifications promptly.5. Be Wary of Unsolicited Offers and Scams
Sometimes, fraudsters make direct contact under the guise of a buyer or an estate agent looking to purchase your property quickly. Be cautious of unsolicited offers, particularly if they seem too good to be true or if the individual refuses to provide identification. If you’re selling a property, only use regulated estate agents and conveyancers to help prevent fraud.What to Do if You Suspect Property Fraud
If you suspect that you’ve been a victim of property fraud or notice anything unusual about your property records, act immediately:- Contact HM Land Registry: If you notice any suspicious activity, report it to HM Land Registry as soon as possible. They can assist in freezing the record or taking further steps to secure your property.
- Report the Fraud to Action Fraud: Action Fraud is the UK’s national reporting centre for fraud and cybercrime. By reporting property fraud, you’ll help ensure that authorities are aware and may be able to track down the fraudsters.
- Seek Legal Advice: If a fraudster has already managed to alter the ownership record, you may need legal advice to help regain control of your property and reverse the damage done.
Common Questions About Property Fraud
Is property fraud common in the UK?
While property fraud isn’t as widespread as other types of fraud, it is on the rise. HM Land Registry is increasingly vigilant, but owners can further protect themselves by staying alert and using the free tools available.
Will my home insurance cover property fraud?
Most home insurance policies don’t cover the legal costs associated with property fraud, so it’s important to take steps to protect yourself. Some legal insurance products may offer limited cover, so it’s worth checking with your provider.
Can I check if my property is already registered?
Yes, you can check this easily through the HM Land Registry website. If it isn’t registered, consider doing so—it’s the best way to keep an official record of ownership.