The UK suffers from a rental crisis. Demand is higher than supply, causing some tenants to offer landlords rents higher than the market rate. The future is bleak, at least in the short term, as experts project that the market will remain as is, worsening housing affordability in the UK.
The tough competition has become a breeding ground for vices like rental scams. Fortunately, the government and private sector players like Remitly offer credible information to help immigrants and all UK residents avoid rental scams.
Let’s dive in to understand rental scams, how to identify one, and what to do if you fall victim.
Understanding Rental Scams
The UK police department for scam reporting, Action Fraud, reported over 5,000 rental fraud cases in the UK in 2023.
Definition and common characteristics of rental scams
Rental fraud/scam occurs when a person deceives a potential renter into paying rent or deposit for a non-existent property, pretends to be the landlord, or tricks them into signing an unfavourable lease.
Landlords are also targets of rental scams. Potential renters may forge documentation to show they can afford the rent.
Overview of rental scams landscape in the UK
Rental scams are prevalent in the UK, and unfortunately, they are also lucrative. Scammers make an average of £1,400 per victim, and some victims have lost as much as £20,000 to rental fraudsters.
Types of Rental Scams in the UK
There are several types of rental scams in the UK. We’ve compiled a list of the most common ones out there:
Fake property listings
Not all property listings are legitimate. Scammers tend to post vague and copied listings with unverifiable addresses.
Upfront fee traps
Fraudsters sweeten the deal by posting cheap rent in attractive locations, creating a sense of urgency for upfront payment to secure the property. Most victims fall prey to scarcity tactics.
False tenancy agreements
Scammers take it a notch higher for potential renters who are hesitant to pay an upfront deposit or rent fees. They create fake tenancy agreements with details similar to the public information on property management company’s websites. They may also use information that may pass as legitimate when you don’t dig deeper.
A potential tenant sends money to the scammer when they feel safe after signing a favourable lease agreement.
Use of fake websites and social media
Online scams are common in the UK, and over 37% of UK adults report seeing fraudulent online advertisements. Most online scams originate from fake websites and social media platforms such as WhatsApp, Facebook, and Instagram, costing the UK £75 million.
For instance, Facebook Marketplace is a hotspot for scams—over 50% of the rental listings are scams. Most scammers post photos of nonexistent or unavailable properties and ask potential renters to pay a deposit or rent beforehand to secure them.
How to Spot Rental Scams
All scams share the same basic characteristics. We’ve outlined a few common warning signs and red flags.
Warning signs and red flags
- Attractive low prices. Scammers post rental properties with usually low prices—lower than the market price for a similar location and house type. Renters should always know the average market price for different housing units in their preferred UK city to gauge how far off the mean the quoted price is.
- Refusal to meet face-to-face. Scammers avoid physical meetings, live calls, or posting updated property photos.
- Urgency. The highly competitive UK rental market landscape makes some renters anxious, especially when they feel short of time. Scammers capitalise on this by creating an urgency to send money or sign a lease agreement. Renters comply out of fear of missing out on a good deal.
- Request for upfront payment. Scammers ask for payment before viewing the property or signing verified lease agreements.
- Unusually attractive photos. Stunning photos attract customers. The more high-quality and inviting, the more a customer will develop interest and emotional connection. Scammers count on this psychological effect when they post luxurious and spacious properties in great locations at low prices. They prefer stock or digitally enhanced images to hook potential renters.
Analysing Rental Listings and Photos
Potential renters need to properly analyse photos and listings before engaging an advertiser. Below, you’ll find our top tips:
- Ensure that the description of the property matches the photos
- Look for minor details such as appliances, paint colours, flooring, roofing, exterior photos, and the surrounding environment
- Analyse how perfect the image is. Some property agents prefer to use high-quality images for their properties, but they will always have imperfections.
- Reverse image search a photo by uploading it on a search engine’s image search tab to see where else the photo has appeared on the internet and if it’s associated with any scams.
- Learn how to detect AI-generated photos using AI image detectors.
Verifying Landlord Legitimacy
Some scammers play the long confidence (con) game. They send you actual photos, allow you to visit the property, and then give you time to consider the deal. At this stage, most renters assume that they are sure that they are dealing with a legitimate landlord. This is when scammers strike with fake tenancy agreements, posing as the real landlord.
Here’s how to verify landlord legitimacy in the UK:
- Check the land registry. The UK government registers land and property owners through HM Land Registry. You can search the online register by entering the correct address or location to find a property’s owner and other relevant details.
- Contact your local council. Not all local councils have landlord details. Only landlords with properties in areas under selective licensing schemes register with the local council. So, it may be possible that a landlord who isn’t on this list is legitimate. Just confirm that they are legally not registered with the council.
- Ask for proof of ownership. Ask for legal documentation as proof of ownership. In the UK, a title deed suffices, and you can authenticate the document by checking with the land registry. You can also ask for safety certificates, including electricity and gas.
Protecting Yourself from Rental Scams
Understanding rental scams in the UK is a step towards protecting your hard-earned money. However, property fraudsters in the UK are increasingly becoming sophisticated.
Tips to ensure safe renting:
- Know the market rates to know when a deal is too good.
- Always view the property in person, even when the listing is from legitimate sources.
- Search the land registry to confirm the title deed.
- Confirm the owner’s identity as registered on the title deed and personal identification documents.
- Confirm the legitimacy of the lease agreement.
- Don’t pay a deposit before signing a legitimate lease agreement.
- Only pay the required amount upfront. Pay for one month’s deposit and one month’s rent only, for example. You can pay rent for the whole year or lease period after you’ve settled in and are comfortable with the state of the house.
- Read customer reviews/testimonials.
- Use reputable letting agents registered with a redress scheme.
Using Established Letting Agents
The UK government requires no special licence or qualification to work as a real estate agent. Any legal worker in the UK with sales/retail skills can practice as a real estate agent. They are mainly guided by the Consumer Protection from Unfair Trading Regulations 2008, Estate Agents Act 1979, and Tenant Fees Act 2019.
The Consumer Protection from Unfair Trading Regulations
The Consumer Protection from Unfair Trading Regulations 2008, commonly known as CPRs, disallow unfair trading practices in the property industry. They apply to both landlords and real estate agents.
Key guidelines from the CPRs:
- Landlords and their agents must not deal with their tenants unfairly.
- Real estate agents must provide comprehensive factual details of the property for potential renters to make informed decisions.
- Failure of landlords and real estate agents to adhere to these rules amounts to a criminal offence.
- Tenants may receive civil remedies if they heavily relied on misleading information to make a decision.
The Estate Agents Act
The Estate Agents Act 1979 is the primary law that governs the real estate industry, whether commercial or residential.
The Act asks real estate agents to:
- Be honest, fair, and prompt when dealing with client issues.
- Reveal clear information on the terms of service, including fees, before agreeing with a client.
- Keep client money in a separate bank account and maintain clear transaction records.
- Provide receipts for all money received.
The Tenant Fees Act
The Tenant Fees Act 2019 protects all renters in the UK from hidden costs and unnecessary charges to increase affordability. The Act bans additional renting fees such as administration, credit check, referencing, and renewal fees.
The Act only allows landlords to ask for only seven types of payments:
- Rent
- Refundable security deposit. It’s billed at a maximum of five weeks’ rent for an annual rent of less than £50,000, and up to a maximum of six weeks’ rent for annual rent above £50,000
- Specific default fees, for example, late rent payment
- Refundable holding/reservation deposit, up to a maximum of one week’s rent
- Early Lease termination fees, when initiated by the tenant
- Tenancy variation, assignment or novation, at a maximum of £50. Landlords may charge higher if deemed reasonable
- Complementary charges like utilities
The UK government further guides real estate agents. It directs all real estate agents working with residential properties to be registered members of an approved redress scheme. Redress schemes resolve disagreements between:
- Tenants and letting agents
- Landlords and tenants
There are only two government-approved redress schemes in the UK:
- The Property Ombudsman (TPO)
- The Property Redress Scheme (PRS).
Renters can confirm a letting agent’s membership status by visiting the PRS member list and TPO member list.
Recommendations for secure transactions
Scammers request payment via complicated and untraceable methods that make it difficult to recover your money. Opt for secure transactions that offer a clear recovery strategy in case you’re scammed. A few recommendations include:
- Direct debit. Send money to a bank account registered in the UK. All UK banks must conduct thorough Know-Your-Customer (KYC) checks so they’ll know who you’re paying
- Avoid cash payments. You can’t prove making any payment without a paper trail.
- Use recognised payment providers. If the landlord or agency doesn’t want a bank account, use secure online rent collection tools such as Paypoint.
What To Do if You are a Victim of Rental Scams
Despite their best efforts, renters sometimes fall victim to rental scams in the UK.
Here’s what to do:
Report the scam to authorities
Rental scam victims can report their cases to Action Fraud online or by phone. Action Fraud is the UK’s national cybercrime and fraud reporting centre. The centre sends all filed reports to the National Fraud Intelligence Bureau (NFIB), which is operated by the City of London Police. The NFIB, among other duties, runs fraud investigations.
Recover your losses
There are several ways to recover money lost to rental fraud in the UK.
- Call the National Fraud helpline for no-win, no-fee agreements. You only pay for the services when you recover your money.
- Hire a solicitor. Most of them offer no-win, no-fee agreements.
- Contact your bank or payment provider. They usually have a time limit within which you can complain and initiate a successful reversal. So, contact them as soon as you realise you’ve been conned.
Get informed via resources for rental scam
Scammers devise new fraud methods every day to stay afloat. Renters should, in turn, be informed about the latest tricks by visiting these rental scam resources.
FAQs
What is rental fraud/scam?
Rental fraud/scam occurs when a person deceives a potential renter into paying rent or deposit for a non-existent property, pretends to be the landlord, or tricks them into signing an unfavourable lease.
What are the types of rental scams in the UK?
The most common types of rental scams in the UK are fake property listings, upfront fee traps, false tenancy agreements, and fake websites and social media listings.
How do I protect myself from rental scams?
Learn the warning signs and red flags, such as urgency to pay, carefully analyse listings and photos, verify landlord legitimacy, pay via secured means, and be updated on the latest tricks.
How do I stay informed and vigilant?
Keep up-to-date by visiting Action Fraud, The National Residential Landlords Association (NRLA), and Tenancy Fraud Forum UK websites or calling them.