Is Your House At Risk From Property Fraud?

Property fraud is a serious problem for UK homeowners, with millions of pounds of loss each year. However, information released by the Land Registry has also revealed that relatively few individuals are taking steps to protect themselves and their homes from fraud.

Criminals are becoming increasingly sophisticated in their methods and the increase in online conveyancing following the pandemic has helped fraudsters avoid detection in some cases. We take a look at some of the main types of property fraud, who is most at risk and what you can do to protect yourself.

Common types of property fraud

Property fraud relies on criminals being able to impersonate someone in a conveyancing transaction. This includes buyers, sellers, borrowers, mortgage companies and solicitors or conveyancers. 

By using false identity and assuming the role of the buyer of a property, fraudsters can access a range of information regarding your home. They will then pull out of the transaction and use the information in a false sale of their own. Alternatively, they may use a false identity to secure money from a mortgage lender.

By pretending to be a seller, criminals can sometimes complete a sale of property that does not belong to them, transferring the purchase money to other accounts so that it cannot be retrieved once the fraud is discovered.

Scammers have also been known to impersonate law firms and to request quick payments to stop a deal from falling through. You should never send money to a solicitor who has emailed you their bank details or told you that the bank details have changed. If you are told that you need to pay quickly or your purchase will not go ahead, you should ring your solicitor on their main office line and advise them of this.

Criminals are also sometimes able to fraudulently transfer property into their name at the Land Registry by sending in a forged transfer document. Once the property is in their name, they mortgage it and disappear with the mortgage advance.

Property fraud case study

In 2021, retired vicar Reverend Mike Hall was working away from home in Wales when a neighbour contacted him to let him know that a builder had started work on his house. He returned home to find the locks had been changed and all of his possessions were gone, right down to the carpets and curtains. 

The property had been sold to a new owner by a fraudster who had impersonated Rev Hall, selling the property and setting up a bank account to receive the proceeds of sale.

By the time Rev Hall found out, the money was long gone, his property was no longer legally his and all of the contents had been disposed of.

The police were uninterested, telling him it was a civil matter and initially leaving him to sort it out himself. 

Because the new owner paid in good faith and was not part of the fraud, they obtained title to the property, meaning Rev Hall no longer owned it, leaving him to bring a claim against the Land Registry. Although an individual was ultimately arrested, the property could not be transferred back to Rev Hall.

Who is most at risk of property fraud?

Fraudsters look for certain attributes when they are hunting for the easiest property frauds to carry out. You are strongly advised to take steps to protect your property ownership if any of the following apply to your home:

• It is not mortgaged
• It is not registered with HM Land Registry
• You have had your identity stolen
• It is a second home or buy to let property or you do not live there
• It is vacant
• The property owner has died and you are the executor or have inherited it
• The property is held by a company
• It is a high value property
• You are selling the property and your seller pulled out of the transaction

How to protect your home from property fraud

Enter an anti-fraud restriction on the Land Register

A restriction can be entered on the Land Register against the title of your property that will make it much harder for a criminal to fraudulently transfer ownership of your home. This will hopefully deter them from trying.

The restriction means that when your property is sold, remortgaged or transferred, a solicitor or conveyancer will have to certify that the transaction is being carried out by you.

At Lockings Solicitors, we can arrange for this restriction to be added at the Land Registry on your behalf. Alternatively, you can also apply to do this yourself. The Land Registry will charge £40 for the entry to be made, unless the property is owned by a company or you do not live at the property, in which case it is free.

Sign up to HM Land Registry’s property alert service

The Land Registry also offer a property alert service and it is recommended that all property owners sign up for this.

It is a way of monitoring Land Registry activity in respect of your title number. While it will not stop fraud from happening, you will be notified if someone takes certain actions, such as carrying out an official search of your title number, which would generally happen if a sale, transfer or remortgage was taking place.

If you receive a notification that someone has ordered an official search, you should urgently contact both an experienced property solicitor and the Land Registry to warn them that you believe fraud is about to be committed so that steps can be taken to protect you from any loss.

You do not have to own the property that you are monitoring, so you can set up an alert for an elderly relative for example. It is possible to monitor up to ten properties.

The monitoring service can be accessed here.

Keep your details with the Land Registry up to date

It is important to make sure that your contact details held by the Land Registry are up to date, so that they can contact you without difficulty if they have any queries or want to send you a notice.

Contact our property solicitors in Beverley, Hull and York.

At Lockings Solicitors we take extensive precautions to ensure that our clients and their properties are safe. If you are concerned about property fraud, we can discuss how you can best be protected.

If you would are thinking of buying a property or you have any questions regarding prevention of property fraud that you would like to ask our East Yorkshire legal team, ring us on 01482 300 200, email us at welcome@lockings.co.uk or fill in our contact form and we will call you back promptly for a FREE initial chat.