Editor's note: This brief was summarised by The Property AI Newsroom from a report by The Negotiator. Read the original article for full details.

Rental Fraud Costs Landlords £9,600 Per Tenancy, Goodlord Warns

Fraudulent tenancy applications are costing UK landlords and letting agencies £4.1 billion a year, according to new research by Goodlord. The referencing provider found that the direct cost of such fraud per tenancy is £9,600, with cases rising by 40% in the past 12 months.

Goodlord analysed more than a million tenancy documents over the past two years. The research highlights that London is the area most affected by this type of rental fraud. The losses stem from illegal subletting or tenants who pay the initial rent but then stop, often taking advantage of the lengthy eviction process.

Rates of fraud are currently between 41 and 46 per 1,000 transactions, indicating a significant risk for both letting agents and landlords. The prime rental market, particularly properties at £10,000 per month, is identified as the sector with the highest risk.

Goodlord reports that fraudsters are increasingly sophisticated, moving beyond single fake documents to creating entire suites of bogus paperwork. This includes fake landlord, bank, and employment references, as well as manipulated IDs, often generated using AI technology.

The impact of this fraud is felt by landlords, agents, and genuine tenants. Landlords are left out of pocket, agents lose valuable time, and honest tenants face increased competition from fraudulent applicants.

Industry figures cited in the report stress the need for improved fraud detection and more robust referencing processes, as fraud tactics continue to evolve.