4 ways to spot a rental scam
Beware of Payment Before Viewing
If you’re asked to make a payment before viewing a rental home in person, it’s a major red flag. No money should change hands, and no contracts should be signed until you’ve seen the property in person.
Scammers might claim it’s to “manage demand” or prevent “time wasters,” or that the payment is refundable if you decide not to rent the property. However, this is a common tactic used in rental scams.
We’ve even encountered cases where scammers conducted virtual viewings via video call to convince victims to pay before an in-person viewing. Even in these situations, you should never hand over any cash.
Beware of Copied Photos in Listings
Fraudsters can be quite lazy. Instead of creating new listings and taking original photos, they often clone genuine listings to save time.
Fortunately, there’s a quick and easy way to spot this scam: reverse-searching the images. You can do this in your browser by right-clicking on an image and selecting ‘search by image’.
Alternatively, you can upload or paste images to tineye.com.
If you find the same image and/or details used repeatedly to advertise different properties, you’re likely dealing with a scam.
Beware of Prices That Are Too Good to Be True
As with any scam, rental fraudsters often try to lure people in with listings that feature eye-catching, below-market rents.
With a shortage of rental housing in the UK, average rents rose by 9% in the 12 months to February 2024 (Office for National Statistics).
If a property seems like a bargain, be suspicious. In the context of rising rents, it’s unlikely to be genuine.
That’s why it’s crucial to do your research by looking at multiple listings for the area and type of home you hope to rent. This will give you a feel for typical market rates.
Beware of Mismatched Payee Names
Even if you manage to view a property, it doesn’t guarantee the deal is genuine. Scammers can gain access to properties they don’t own to conduct bogus viewings.
If the property is advertised through a local agency, call or visit the agency’s registered office to confirm its legitimacy.
For properties advertised by private landlords, it can be harder to verify their authenticity. You can check via your local authority’s landlord licensing scheme or consult the Land Registry for the property owner’s name (this costs £3). Ask to see proof of identity, such as a passport.
When it’s time to transfer the deposit, ensure the payee name matches the name of the company or landlord you believe you’re dealing with. If it doesn’t, you could be paying a scammer or their money mule.
Never pay in cash or via unprotected methods such as cryptocurrency or gift cards. Requests to pay this way are major red flags.
What landlords should watch out for in 2024
In 2024, landlords should be aware of several key trends and changes that could impact their property management and investment strategies:
- Regulatory Changes
- Renters (Reform) Bill: This bill is making its way through Parliament and could introduce significant changes to the private rented sector, including the abolition of Section 21 “no-fault” evictions and the introduction of a new Ombudsman for private landlords1.
- Tenant Protections: Expect stricter rules around eviction processes, rent increases, and lease terminations. Many regions are enhancing “just cause” eviction laws, requiring landlords to provide valid reasons for evicting tenants2.
- Economic Factors
- Mortgage Rates: Mortgage rates are expected to remain relatively stable, but landlords should keep an eye on the Bank of England’s base rate and inflation trends, as these can affect borrowing costs1.
- Tax Changes: There are both positive and negative tax changes on the horizon. For instance, Class 2 National Insurance is being scrapped, but the freeze on Income Tax bands and the reduction in the Capital Gains tax-free allowance could impact landlords’ finances1.
- Market Trends
- Rental Costs: Rental costs are expected to stabilize, but landlords should be prepared for continued volatility in the housing market3.
- Property Valuations: The increase in average capital values since the pandemic may have boosted equity for many landlords. It’s a good time to get properties valued and consider remortgaging to leverage this equity for new investments1.
- Environmental and Energy Efficiency Standards
- Sustainability: Governments are increasingly mandating energy efficiency standards for rental properties. Landlords should consider conducting energy audits and investing in eco-friendly upgrades to comply with these regulations and attract environmentally conscious tenants2.
- Technological Advancements
- PropTech: The adoption of property technology (PropTech) is on the rise. Tools for virtual viewings, online rent payments, and digital lease agreements can streamline operations and improve tenant experiences2.
- General Election
- Political Landscape: With a General Election expected in 2024, the political landscape could shift, potentially bringing new policies that affect the private rented sector. Landlords should stay informed about political developments and be prepared to adapt to new regulations1.