More than a third (36%) of letting agents lack full confidence in their client money safeguards, according to new research.
The Letting Partnership commissioned the survey of letting agents in England. It found that 35% have experienced or identified an attempted financial fraud or scam linked to their lettings activity within the last 12 months.
The findings come as the Government outlines plans for greater regulation of property agents, including letting agents, with client money handling and financial accountability among the issues attracting scrutiny. The Letting Partnership argues the results show why stronger financial safeguards, alongside professional qualifications and licensing, should be central to efforts to raise standards across the sector.
Some 54% of respondents think letting agents are more exposed to financial fraud and scams than they were three years ago, while 8% think exposure has fallen. Phishing and impersonation of landlords or tenants was the most commonly encountered type of attempted fraud or suspicious activity, cited by 26%, followed by suspicious third-party rent payments at 21%. AI-generated fraud, impersonation and deepfake scams ranked third, already encountered by 18%.
AI-enabled fraud nonetheless topped the list of future threats, selected by 29% of respondents. It placed ahead of tenant and payment fraud (27%) and money laundering or suspicious funds (12%).
On client money safeguards, 64% of respondents said they were completely confident in their business’s ability to identify a fraudulent or suspicious client money transaction before funds were transferred, while 36% were not. The Letting Partnership said the figure underlines the importance of client accounting processes, payment verification procedures and financial oversight.
“The fact that more than a third of letting agents aren’t completely confident in their ability to identify a suspicious client money transaction before funds are transferred should be a real concern, particularly when over a third have encountered attempted financial fraud in the last year alone,” said Chris Mason, chief operating officer at The Letting Partnership.
“The emergence of AI-enabled fraud is making the threat increasingly sophisticated, and it’s telling that the industry already considers it the greatest financial security risk moving forward, despite more traditional forms of fraud remaining prevalent,” he added.
“With the Government now looking to strengthen regulation of property agents, there’s an opportunity to ensure that greater professional accountability is matched by stronger financial safeguards,” he noted. “Licensing and qualifications are important, but so too are the client accounting systems, verification procedures and financial controls that protect landlord and tenant money on a daily basis.”
