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

Tenancy Fraud Poses £4.1bn Annual Risk to UK Rental Sector

Fraudulent tenancy applications could expose the UK’s private rented sector to as much as £4.1 billion in direct financial losses each year, according to analysis by Goodlord. The findings are based on more than one million tenant references reviewed between July 2025 and June 2026.

Goodlord’s research found that 41 applications per 1,000 references were flagged for suspected fraud during this period. This figure, while below a peak of 46.6 per 1,000 in late 2024, remains well above historic levels. The company reported that incidences of suspected fraud increased by almost 40% in 2025 compared with 2024.

The estimated average direct financial exposure associated with a fraudulent tenancy is £9,601. This figure includes costs such as rent arrears, legal and court fees, bailiff fees, void periods, and property damage. Goodlord applied the observed suspected fraud rate to an estimated 5.3 million privately rented households in the UK, assuming an average of two tenant references per household, to calculate the potential annual exposure of up to £4.1 billion.

Analysis of confirmed fraud cases revealed significant regional differences. London recorded a rate almost twice the national average and the highest of any region. The West Midlands had the second-highest confirmed fraud rate, followed by the North West and applications from overseas.

Fraud rates were particularly high among the most expensive rental properties. Homes costing more than £10,000 a month recorded rates approaching 18 per 1,000 applications, which is between three and six times the level seen across average rental properties.

Looking specifically at confirmed fraud during 2025, fake employment references were the fastest-growing category, increasing 226.6% year-on-year. Referee fraud rose by 146.4%, and identity manipulation increased by 140.4%. Goodlord reported that every major fraud category had declined slightly so far in 2026, but fake references, bogus referees, and forged payslips remained above 2024 levels.

These findings highlight the ongoing risks for letting agents and inventory clerks, particularly in high-value and London markets. The data underscores the importance of robust tenant referencing and regular review of fraud detection systems.