House fraud: how to protect your home

Instances of people having their homes stolen are increasing. Natalie Stanton explains how the scam works, and how you can stay safe.

If you own property, there's a good chance that it's your most expensive asset. And like any other valuable asset, that makes it attractive to thieves. Of course, nobody can pick up your house and run away with it. A canny fraudster, however, can steal (or at least borrow) your identity in order to sell or mortgage the property, and pocket the proceeds.

It almost sounds far-fetched, but this type ofhousefraud is becoming increasingly common, particularly in London and the south-east, where rising prices have made property an increasingly tempting target. The Metropolitan Police reported four such cases in the last few months of 2015 alone, and since 2009 the Land Registry has prevented fraudulent transactions worth more than £74m from being registered. So how does this type of crime work in practice? And what steps can you take to ensure your home is safe from the fraudsters?

How to steal a house

Meanwhile, an associate of the fake tenant changed her name by deed poll to "Penelope Hastings", and secured a passport under the name. "Hafter" then put the property up for sale through a separate estate agency, claiming to be acting on the behalf of Hastings. The house duly sold for £1.35m and the proceeds were last seen winging their way to a bank in Dubai, according to Hastings, writing in the Daily Mail.

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Fortunately for the real Mrs Hastings, Land Registry smelled a rat and declined to register the sale. This stopped the transaction from going through, which means that Hastings still owns the property. However, the case is still being investigated by police, and six months on the unsuspecting buyer is yet to receive her money back. Throughout the process, there were various parties who could have spotted the fraudulent activity and raised the alarm, but didn't.

The lettings agency used by the fake "Hafter", for example, outsourced references to a credit referencing agency, which deemed his documents "acceptable". The agency did not note anything odd about the fact that "Hafter" made all his payments in cash.

Meanwhile, the estate agency employed by the fake Penny Hastings said it has done nothing wrong and that it couldn't have been expected to spot the fraud because the "vendor" was in possession of a genuine identification document the passport.

What are the risks?

If you fit this bill, the first step should be to ensure your property is actually registered with the Land Registry. If registered, you may qualify for compensation if fraudsters do manage to sell your property. Next, sign up for the Land Registry's free Property Alert service. This will send you updates when there is certain activity on your property, alerting you to anything suspicious.

Finally, if you feel that your property is high risk, then it's possible to enter a "restriction", which stops all activity for example, a transfer of title or a mortgage unless a conveyancer or solicitor confirms the application was made by you. If you're worried you've already been subject to fraud, contact the Citizens Advice Bureau or Action Fraud, and seek professional legal advice.

Natalie joined MoneyWeek in March 2015. Prior to that she worked as a reporter for The Lawyer, and a researcher/writer for legal careers publication the Chambers Student Guide. 

She has an undergraduate degree in Politics with Media from the University of East Anglia, and a Master’s degree in International Conflict Studies from King’s College, London.