Fraudulent tenancy applications could be costing the UK’s private rented sector up to £4.1 billion a year, according to new analysis from Goodlord, with suspected UK tenancy fraud rising 40 per cent in 2025 as artificial intelligence makes forged documents cheaper and more convincing than ever.
The referencing firm analysed more than a million completed references submitted between April 2023 and July 2026. Between July 2025 and June 2026, 41 tenancy applications per 1,000 references were flagged for suspected fraud.
That is down slightly from a peak of 46.6 per 1,000 in late 2024, but remains well above historic levels. The direction of travel over the past two years is unmistakably upwards.
London and high-value homes bear the brunt
Fraud rates in London were more than twice the national average, according to Goodlord, with the West Midlands recording the next highest rate, followed by the North West.
Fraudsters are also deliberately targeting the top of the market. Properties renting for more than £10,000 a month saw fraud rates of nearly 18 per 1,000 applications, three to six times higher than the rate of confirmed fraud across average rental properties.
For portfolio investors holding prime London stock, the two risk factors compound. The capital’s most expensive lettings now sit squarely in the fraudsters’ sights.
Fake employers, fake referees, fake people
The nature of the threat is changing as quickly as its scale. Goodlord found AI is increasingly being used to forge payslips and references, and to construct entire false identities.
Fake employment references were the fastest-growing fraud type in 2025, up 226.6 per cent year on year. Referee fraud rose 146.4 per cent and identity manipulation 140.4 per cent over the same period, according to Goodlord’s 2026 fraud report.
Nishma Parekh, director of referencing at Goodlord, said: “Behind these numbers are real people and real money: landlords left out of pocket, agents’ time wasted, and honest tenants competing against fraudulent applicants for homes.
“Rental fraud isn’t new or hypothetical, we’ve seen fraudsters operating first-hand. But what’s changing is how sophisticated fraud has become. Fraudsters are no longer relying on a single forged payslip, they’re building entire fake identities, combined with false employers and invented referees.”
A £9,601 bill for every fraudulent tenancy
To reach its £4.1 billion figure, Goodlord combined its observed suspected fraud rate with publicly available estimates for legal costs, court fees, bailiff fees, rent arrears, void periods and property damage. On that basis, it puts the average direct financial exposure of a fraudulent tenancy at £9,601 per case.
That figure understates the pain for individual landlords. A fraudulent tenant who stops paying can take months to remove, a problem that would sharpen under proposals that could leave landlords absorbing up to 12 months of unpaid rent before regaining possession.
Chris Norris, chief policy officer at the National Residential Landlords Association, said: “This report should act as a wake-up call for landlords across the sector. The market is now falling prey to increasingly sophisticated types of fraud and landlords need to take every step to protect themselves from these risks.”
What this means for investors
The message for landlords is that referencing can no longer be a box-ticking exercise. The NRLA advises verifying employment directly with employers rather than accepting documents at face value, as set out in its complete guide to tenant referencing.
Investors should pair robust digital referencing with rent guarantee and legal expenses cover to limit downside if a fraudulent applicant slips through. Reviewing your lettings technology and referencing tools is a sensible first step.
With AI lowering the cost of convincing forgeries, fraud rates are unlikely to return to historic norms. Landlords who treat verification as a core investment discipline, rather than an administrative chore, will be the ones who keep that £9,601 per case off their books.
