A new type of housing fraud that can affect landlords has been highlighted by Lucy Warwick-Ching, writing in the Daily Star in May 2017.
The practice is known as ‘property hijacking’ and works through tenants living in residential property changing their name by deed poll to that of the legitimate property owner in order to assume the identity of their landlord. They can then attempt to sell the property or take out a bridging loan secured on it.
In one case, tenants posing as the owners of a £3m property managed to secure a £1.2m bridging loan secured on it. Once funds were available, the money was transferred out of the country before the fraud was detected. The two people committing the crime were eventually caught and received jail sentences.
This type of fraud can be prevented with the help of a free alert service set up with the Land Registry. This will alert homeowners of any activity such as an application to change ownership details. Property owners should also make sure that their contact details are up to date on the Land Registry records.
Property hacking frauds are easy to track by the police and authorities, which means that the risk of someone fraudulently obtaining a bridging loan on your property is low.
Of course, the vast majority of people have legitimate reasons for needing a bridging loan secured on their property, and a bridging finance broker can find the best deals for borrowers.