Rental scams have been hitting the headlines as this kind of crime, which takes advantage of a tenant's desperation to find a home, becomes a growing problem.
Housing charity Shelter recently said that a quarter of a million people are being scammed every year at the moment, up from approximately 150,000 in 2013/4. The charity also says that over £700 million will be stolen from tenants.
If you think you’ll too clever to get caught out, think again. Here’s our guide to the most common rental scams that catch people out.
Fake holding payments
How it works: Criminals have been caught stealing pictures and property descriptions from websites such as Rightmove and re-posting them via Facebook or general listings websites such as Gumtree. The scammers ask for a holding deposit to secure the property and, before a viewing can be arranged, disappear.
One thing to remember - if a property appears to be amazing value, then beware. Many scammers get potential victims to drop their guard this way.
To prevent it: Be wary of paying a holding deposit, however desperate you are, because although they're common and perfects legal, scammers take advantage of this and ask victims for rental deposits for properties that don't exist. And remember that since June 2019 they have been capped by law at a week's rent.
Fake deposits
How it works: A tenant who is already living in a property advertises a ‘fake room’ in the flat/house, asking for a deposit and five weeks' rent (the maximumnow allowed by law). They then disappear before any of the scammed tenants realise what's going on.
To prevent it: Be wary of properties advertised to rent on social media or on property portals other than Rightmove, Zoopla, or OnTheMarket.
Illegal subletting
How it works: Fraudsters rent out an entire house from a real landlord and sub-let the rooms in the house, often pocketing the rent rather than passing it on to the real landlord. After a few months the unsuspecting scammed tenants find bailiffs or the real landlord knocking on their door chasing rental payments already made by them to the 'fake landlord'.
To prevent it: Never rent a property without signing a bona fide rental contract which should list who the landlord is and where they live.
Stolen deposits
How it works: Many landlords and tenants get caught out by fake agents who set up credible websites or sometimes shops and, for several months, take deposits from tenants for properties that are not available or have already been rented out. When the calls from angry people grow loud and the police are called, they disappear and set up somewhere else.
Rogue agents
How it works: The law requires letting agents and landlords to protect tenants’ deposits by lodging the cash with an approved scheme or taking out insurance. A small but significant minority of agents don’t do this and use the cash instead to prop up their ailing business. When it finally goes bankrupt, the tenants are left high and dry.
To prevent it: Tenants should ALWAYS insist that their landlord or agent shows them proof that their deposit has been protected, which the law says they must within 30 days of moving in.
Phishing scams
How it works: Online hackers send out thousands of emails that pretend to be from one of the big property portals such as Rightmove asking the recipient to pay their rental deposit and first month’s rent. The vast majority of people will delete it, but enough people who are about to rent a property and don’t understand how renting works are caught out and send the money to the criminal’s account, never to see it again.
To prevent it: Be aware how the rental property market works before you enter it - a portal like Rightmove would never take payments directly from a tenant.
CreditLadder can help you improve your credit score
If you want to improve your credit position by reporting your rent payments, CreditLadder is the first way to improve your credit score and position across all four of the main Credit Reference Agencies in the UK, namely Experian, Equifax, TransUnion and Crediva. Building up a high credit score has a lot of benefits, including helping you access finance at better rates - this can also help save you money.
CreditLadder also runs a free mortgage application service which will tell you how much you could borrow should you be looking to buy your first home.
