City police are preparing a big increase in mortgage fraud probes under a plan that highlights alarm about the impact of the problem on business and residential property markets. Financial Times

But the lending industry challenged a police chiefs’ report that claimed mortgage scams raked in at least £700m a year and were linked to the financing of organised crime and perhaps even terrorist “safe houses”.

The lending industry has derided recent research by police chiefs estimating the extent of mortgage fraud at £700m a year.

The Council for Mortgage Lenders, which represents the big residential lenders, said research by the Association of Chief Police Officers “contained only limited information” and was likely to include “a considerable amount of double-counting”.

The police report linked mortgage scams to organised crime and even to funding terrorism, pointing out they were attractive to criminals because they offered high profits and low risks of detection.