In its Fraudtrack survey, the firm said mortgage fraud totalled £375m in 2009 and made up 27% of fraud in the finance and insurance sector. Typical mortgage frauds included a large loan being taken out on an overvalued property, with a buyer in collusion with a valuer and a lawyer.

It said the amount of money lost by businesses and the public sector to overall fraud increased by 76% during the recession last year to more than £2bn, with the average value and size of the frauds increasing dramatically.

Simon Bevan, head of fraud at BDO, said fraud would treble over the next two years because businesses would discover more cases as the economy emerged from recession.

He added: “It may have become more difficult for the person on the street to secure a home loan, but the mortgage fraud industry is booming. A large part of this will be a tidal wave of fraudulent borrowing that has only just started to appear particularly through the use of over-valued properties as security for loans.”

Paul White, consultant at Belgravia Insurance Consultants, said a greater level of awareness in the mortgage market was needed to tackle fraud.

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He said: “In a market downturn, people may be tempted to commit mortgage fraud and begin to take risks so a great deal of vigilance is needed. As it seems that some sophisticated frauds take years to organise, it may be a long time before the full extent of fraud during the recession is revealed.”

However, Jock Cassidy, director at Ashley Law, said he did not believe that fraud would increase because the FSA had alerted lenders and banks that they need to be more diligent.

He added: “Lenders are being increasingly careful in their credit checks and their scrutiny of documentation so it is harder to commit fraud.”