Mortgage fraud on the rise as lenders get tough

The number of buyers lying about their finances is on the rise as lenders toughen up on borrowing criteria, new research has revealed.

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The study, by Experian, found that mortgage fraud has increased by 23 per cent compared with last year as Brits try to get a foot on the property ladder or switch lender for a better deal.

Though those with a sizeable deposit are now able to take advantage of a new wave of low-interest deals, others were resorting to misrepresentation of employment and credit information.

Others were economical with the truth when it came to the use of the property - with many saying they intended to use it as their home when in fact they planned to take advantage of soaring rents and let the property.

James Jones, head of consumer affairs at Experian, told the Daily Mail: "The increase certainly reflects the fact that many households are increasingly cash-strapped and resorting to ever more desperate measures.

"Nearly a quarter of mortgage fraud is due to people inflating their incomes."

Elsewhere, the number of fraudulent savings account applications more than doubled to 13 in every 10,000, the majority of which was shown to be via third parties keen on using the system to launder money.

Current account fraud rates also rose, though only by two per cent, as "financially stressed" Brits again resorted to lying about their finances.

However, fraud in the automotive finance industry dropped by 32 per cent and attempted insurance fraud was down by 16 per cent on last year.

Would you resort to lying about your finances in order to get on the property ladder, or is it asking for trouble in the long run? Leave your comments below...