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

Tenant Fraud Now a Major Risk for UK Landlords, Data Shows

Tenant fraud has become a frontline concern for private landlords in the UK, driven by legislative changes, economic pressures, and increasingly sophisticated forgery techniques. Recent data highlights a sharp rise in fraudulent tenancy applications and significant financial losses for landlords.

Research cited by Mortgage Strategy estimates that tenancy fraud is costing UK landlords approximately £266 million each month, with most landlords unable to recover these losses. Analysis of over 300,000 tenancy applications by Goodlord found that detected fraud increased from just over one case per 1,000 applications in 2022 to 2.9 cases per 1,000 in 2023, representing a 140% year-on-year rise.

Common Tactics and Document Fraud

According to the report, 94% of fraud cases involve fake documents, with doctored bank statements being the most common method used by fraudulent applicants. The Cifas Fraudscape 2026 report recorded more than 444,000 cases in the National Fraud Database in 2025, the highest annual figure to date. Within this, tenant referencing-related filings increased by 263 cases, indicating growing awareness among referencing professionals of fraud attempts at the application stage.

Traditional document-based referencing, such as payslips or bank statements, is becoming less reliable due to the availability of AI tools that can quickly generate convincing fraudulent documents.

Legislative Changes and Increased Risks

The introduction of the Renters’ Rights Act 2025 has raised the stakes for landlords. With the abolition of Section 21, landlords can no longer recover possession without a specific legal ground, and Section 8 notice periods have been extended, in many cases to four months. Court backlogs can further delay possession proceedings. For landlords who unknowingly let to fraudulent tenants, this can mean lengthy possession processes, potential rent arrears, and limited recourse.

While Ground 17 of the Housing Act provides a discretionary possession route for tenancies obtained by false statement, it requires clear evidence and is not guaranteed to be swift or successful. Recent research found that around 20% of landlords reported being victims of illegal subletting, and 8% had experienced fake financial information from prospective tenants. Fraudulent tenancies can also lead to properties being used for illegal purposes or suffering substantial damage.

Best Practice for Letting Agents and Inventory Clerks

The report emphasises that robust referencing, including identity verification and professional tenant referencing, significantly reduces exposure to fraud. Best practice now involves multiple layers, such as passport or driving licence checks, independent employment and income verification, and direct data verification through Open Banking or HMRC income validation. Refusals to use Open Banking should be scrutinised. Previous landlord references should be obtained directly, ideally from a landlord prior to the current one, and detailed records of all checks should be maintained.