"While more needs to be done to raise the awareness of just how serious a crime mortgage fraud is, the Government also needs to look at the root cause of this issue."
- Ben Thompson, deputy CEO at Mortgage Advice Bureau
1 in 6 (16%) UK adults have admitted that they, or someone they know, have misled mortgage companies about their annual salary in order to purchase their dream home.
The survey, commissioned by fraud prevention service, Cifas, revealed that several respondents were prepared to dishonestly inflate their earnings by as much as £10,000, and even forge payslips, to get the keys to their new home.
Surveying 2,000 UK adults, the research revealed that 14% of respondents did not think it was illegal to provide mortgage lenders with misleading information, with nearly 1 in 10 (9%) believing it was ‘reasonable’ to exaggerate their income. The most likely age group to commit this type of fraud was 25-34 (16%).
Overall, Cifas’ research revealed a year-on-year increase in people committing one or more first party frauds – with 1 in 8 UK adults admitting they had done so in the last 12 months.
Mike Haley, CEO of Cifas, said: "While buying your dream home can be an extremely exciting time, it is important to be realistic about what is affordable. Being dishonest about earnings and providing false information when applying for a mortgage is not the answer – not only are you breaking the law, but it can make life incredibly difficult when making repayments.
"First party fraud is not ‘reasonable’ to commit nor is it victimless. Exaggerating earnings and even going as far as to supply forged payslips can result in a number of severe consequences. Bank accounts can be closed, credit scores will be harmed, and many individuals could find themselves with a criminal record and even a prison sentence."
Ben Thompson, deputy CEO at Mortgage Advice Bureau, added: "The findings point to this fraudulent activity being most common among younger homebuyers and this is perhaps not a surprise, given the affordability barriers that hold this generation back from the very reasonable aspiration of owning their own home.
"While more needs to be done to raise the awareness of just how serious a crime mortgage fraud is, the Government also needs to look at the root cause of this issue. And for younger buyers in particular, it must use the various tools it has at its disposal to smooth the path into homeownership. It shouldn’t be the norm that people can’t buy their first property until they are well into their 30s, and the government must do more.
"To help the fight against fraud, we continue to train and advise MAB advisers to constantly look out for any suspicious activity or application data, thereby helping to protect themselves and their customers, as well as the financial institutions. Awareness of this issue at all levels is key, especially in more pressured financial times we are now in."
