Fraudulent tenancy applications could be exposing the UK's private rented sector to up to £4.1bn in financial losses every year, according to new research from referencing platform Goodlord.
The company analysed data from more than a million tenant references over the last two years and found that fraudsters are increasingly using AI to construct entire false identities, rather than simply forging individual documents.
The research, published on 5 August, is one of the most detailed studies yet into how tenancy fraud is evolving and who is bearing the cost. Its release coincides with the summer peak in new tenancy activity, when agents face the heaviest referencing workloads.
Goodlord's analysis found 41 tenancy applications per 1,000 references were flagged for suspected fraud between July 2025 and June 2026. While that is down from a peak of 46.6 per 1,000 in late 2024, suspected fraud remains well above historic norms. Across 2025 as a whole, incidences of suspected fraud rose by almost 40% compared with the previous year.
To quantify the financial exposure, Goodlord combined its observed fraud rate with publicly available estimates covering legal costs, court fees, bailiff fees, rent arrears, void periods and property damage.
On that basis, the average direct financial exposure from a single fraudulent tenancy is estimated at £9,601. Applied across the UK's 5.3 million privately rented households and assuming an average of two tenant references per household, the analysis suggests the sector faces up to £4.1bn in direct financial losses each year.
The human cost behind those figures is illustrated by one landlord's experience. Ilyas DeGia, 55, a part-time landlord from London, said:
"Two years ago, I fell victim to tenant fraud. A fraudulent tenant used fake documents to secure a tenancy on my property, paid the initial rent, then illegally sub-let it to students. I was a hobbyist landlord - this was the only property I owned - so the financial and emotional impact was huge. I lost thousands, and it took a real toll on my health, with the police, council and courts all having to get involved. I am exiting the market, because that experience, combined with recent regulatory changes, has made being a landlord untenable. It's simply not worth it anymore."
Where fraud is concentrated
Tenancy fraud is not evenly distributed. Goodlord's analysis of confirmed cases identifies several regional and market hotspots:
- London recorded the highest confirmed fraud rate in the country, at nearly twice the national average.
- The West Midlands had the second-highest rate, followed by the North West and overseas tenancy applications.
- High-value properties are disproportionately targeted. Homes renting for more than £10,000 a month recorded confirmed fraud rates approaching 18 per 1,000 applications, three to six times the rate seen across typical rental stock.
How AI is changing fraud tactics
The research points to a significant shift in how fraud is carried out. Rather than submitting a single forged payslip or doctored reference, fraudsters are building layered false identities, combining fabricated employers, manipulated ID and invented referees to pass referencing checks.
The data captures that shift in the types of fraud recorded last year:
- Fake employment references were the fastest-growing fraud category in 2025, up 226.6% year-on-year.
- Referee fraud rose 146.4%, and identity manipulation increased 140.4%, as fraudsters targeted the verification process itself rather than individual documents.
- Every major category of fraud has fallen slightly so far in 2026, but fake references, bogus referees and forged payslips all remain above 2024 levels.
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.
"This is why no single verification method is enough on its own. As trusted, independently verified data - such as direct-to-source income verification - becomes the norm, fraudsters adapt around it.
"The industry needs to move from spotting one red flag to identifying patterns across the referencing journey - and to consistently review those checks, as fraud tactics evolve."
Chris Norris, chief policy officer at the National Residential Landlords Association, added, "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.
"Crucially, when landlords believe they have been the victims of fraud they should immediately contact the police and Action Fraud to report their concerns.
"Although due to the use of advanced AI models it has never been easier to generate fraudulent documents, landlords must ensure their referencing checks evolve to respond to fast-moving technological developments. In practice this means undertaking regular reviews of the systems they use to assess applications to reduce the chance of becoming a victim of fraud."
