Increasing numbers of home-buyers are falsifying credit and job histories in order to get a mortgage, new figures reveal.
Mortgage application fraud rose by 9% in 2012 from 2011, a report by credit rating firm Experian shows.
Application fraud edged up 3% across the financial services sector, also lifted by more credit card and savings fraud. Experian said this is likely to continue rising in 2013 as consumers come under further pressure.
But fraudulent applications for current accounts dropped by 25% in 2012, as companies become more vigilant.
Nick Mothershaw, UK director of identity and fraud at Experian, said: "A decline in current account fraud is a positive step for the financial services industry as current account fraud is often the first step for fraudsters who later plan mortgage, loan or credit card deception.
"It is also important to highlight that the drop is very much the result of better systems and vigilance by financial services providers."
The number of fraudulent mortgage applications increased to 38 in every 10,000, up from 35 per 10,000 in 2011, and significantly above the 18 per 10,000 seen in 2007.
Almost nine out of 10 fraudulent mortgage applications were down to people falsifying their personal circumstances such as job history, work status and credit history.
Those most likely to submit a fraudulent mortgage application were middle-aged and skilled working class individuals. Across financial services, Experian said fraud was most likely among relatively routine urban workers, which it calls the "terraced melting pot", who were behind 21% of fraud cases.
Experian said it expects fraudulent applications to continue rising this year, driven by the ongoing squeeze on benefits and household incomes, with stricter credit and lending criteria driving more attempts.