Mortgage fraud going largely undetected, despite rising risk

The true scale of mortgage fraud in the UK may be far greater than official enforcement figures suggest, warns client due diligence platform Thirdfort. 

Mortgage fraud often involves forged documentation, fake identities, or income misrepresentation to deceive lenders, placing legal and property professionals at serious risk.

A Freedom of Information request made by Thirdfort to the FCA has revealed that there have been only 17 enforcement investigations into mortgage fraud since 2018. 

According to the data, the number of investigations peaked in 2019 (5 cases), with activity continuing across 2022–2024 (averaging 3-4 cases annually). The data also shows two dormant years (2020–2021), possibly linked to pandemic-related disruption in financial crime detection and enforcement.

However, broader industry data paints a different picture, suggesting that mortgage fraud remains both widespread and significantly under-reported.

Data from UK Finance revealed that there were losses of £1.17bn to fraud in 2023, and analysis from Apex Bridging suggests mortgage fraud is growing. 

Research from Cifas found that 1 in 6 UK adults admit to or know someone who has misled a lender to secure a mortgage, while the use of AI-generated fake documents and identity fraud is making detection harder.

Apex Bridging also reported a 32.8% spike in mortgage fraud cases between 2022 and 2023.

Olly Thornton-Berry, co-founder and CEO of Thirdfort, commented: “These figures suggest that the number of mortgage fraud investigations is relatively low, but of course that’s not the full picture. In the UK, in addition to the FCA, the Serious Fraud Office (SFO), local police forces, and the National Crime Agency (NCA) all play a role in investigating cases involving suspected mortgage fraud. 

"Moreover, with fraudsters becoming more sophisticated, and industry data telling a different story, it’s likely that there’s a significant amount of fraudulent activity going undetected.”