A trade body has revealed that lenders are witnessing a rise in mortgage application fraud, as consumers attempt to get around their restricting lending criteria.

The Council of Mortgage Lenders, (CML) said its members had seen an increase in the number of people entering false information on application forms, particularly inflating the level of their income.

The problem has come around due to buyers trying to take advantage of the vulnerable house prices to get on to or trade up the property ladder.

Potential buyers are also hiding credit card or loan debts; for fear that this may make the mortgage for which they are applying look less affordable.

Sarah Robson, for the CML, commented: "We don't keep figures on mortgage fraud but from anecdotal evidence we do know that it has increased.

"That is to be expected as lenders' criteria has tightened and would-be borrowers who are cut out are trying to circumnavigate this. But lenders are vigilant to it, so they are picking it up."