If you mislead a lender about the sale price of your home, you could be committing fraud. Find out how this crime works and how to protect yourself.First published: 04/04/2016 Last updated: 20/03/2023 See all updates
On this page
If you use false details with mortgage lenders, or you know that the information being used by others is misleading or incorrect, you could be committing fraud.
Fraud is a crime, and you could face prosecution.
Quick sale offers
If you've fallen behind with your mortgage or you’re worried about repossession, you may be contacted with a quick sale offer.
These offers usually involve companies buying your home at a discounted price in exchange for completing the deal quickly. The buyer may call these deals 'below market value', 'BMV' or 'distressed property sales'.
The discount is often around 20%, but can be as much as 35% below the market value of the property.
These offers may include a promise to:
- complete the deal within 48 hours
- pay you in cash
- help you avoid legal and estate agent fees
- guarantee the sale
But it’s important to know that some quick sale offers could involve fraud.
Some quick sale companies target people who are struggling with money. They may act in ways that are not in your financial interest, and could leave you with much less than you would have been entitled to.
You should always be cautious and check what you’re being offered with Citizens Advice or a solicitor.
False sale prices
If the buyer or the seller of a property deliberately lies about the purchase price to a mortgage company, then this is fraud and can lead to prosecution.
If you're selling your home, the buyer may want to trick mortgage providers into lending the full amount for your property, rather than having to pay a deposit themselves.
For example, you may agree to sell your home for £120,000. But the buyer may tell the mortgage provider that you’re selling it for £150,000.
The buyer can then request a loan of £120,000 and pretend that they will cover the rest with a deposit. But in fact, the lender will be covering the full cost.
This type of fraud could mean that the buyer is able to access better mortgage deals and avoid paying a deposit. But misleading the lender in this way is breaking the law, and it may mean that you and the buyer face prosecution.
How to protect yourself
Remember, if you lie about the price of the property you’re selling, you may be committing fraud. It could put the sale at risk, and you may even face prosecution.
If you’re being asked to act in a way that makes you think there’s fraud involved, you should report the matter to the police.
If you’re receiving benefits, you should also know that overstating the price paid for your home could affect your payments. It may be assumed that you have more money than you do from the sale of the property.
While a quick sale may be helpful for some people, there are other steps you can take to deal with problems paying your mortgage. These options might leave you better off, so make sure you contact your lender to find out more.
Sale and rent back
In some cases, you may be offered the option to stay in your property and rent it from an investor who buys it. This is known as a 'sale and rent back' agreement, and firms offering it must be authorised by us.
Firms may offer you other solutions that appear to repay your debts and allow you to remain in your home without selling it. But we urge you to treat all offers like this with caution.