Fraudulent tenancy applications could be exposing the UK’s private rented sector to up to £4.1 billion in financial losses every year claims Goodlord.

The fraud takes the form of AI-generated fake payslips, references and even entire identities. 

The research analysed data from over a million  tenant references over the last two years.

Goodlord’s analysis found that 41 tenancy applications per 1,000 references were flagged for suspected fraud between July 2025 and June 2026. 

While this is down slightly from a peak of 46.6 per 1,000 references in late 2024, suspected fraud remains well above historic levels. 

Overall, incidences of suspected fraud increased by almost 40% during 2025 compared with the previous year, underlining that tenancy fraud remains a growing challenge despite recent improvements. 

To estimate the potential financial impact, 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. 

The analysis estimates the average direct financial exposure associated with a fraudulent tenancy at £9,601.

Applying the current suspected fraud rate across the UK’s estimated 5.3 million privately rented households, while assuming an average of two tenant references per household, suggests fraudulent tenancy applications could expose the sector to up to £4.1 billion in direct financial losses each year.

Where fraud is worst 

Goodlord’s analysis of confirmed cases of fraud shows that the problem isn’t spread evenly across the country. 

Some fraud hotspots emerged from the data, with London coming out on top. 

The data shows:

• London is the UK’s fraud epicentre, with confirmed fraud rates almost twice the national average and higher than anywhere else in the country 
• The West Midlands has the second-highest confirmed fraud rate, followed by the North West and overseas tenancy applications
• The most expensive properties are the biggest fraud targets. Homes renting for more than £10,000 a month see confirmed fraud rates approaching 18 per 1,000 applications – three to six times higher than the rate of confirmed fraud seen across average rental properties 

AI is changing how fraudsters operate 

Goodlord’s data on confirmed fraud suggests fraudsters are moving away from a single forged document and towards building an entire fake identity – combining bogus employers, doctored ID and invented referees to slip past referencing checks. 

The findings show:

• Fake employment references were the fastest-growing type of fraud in 2025, up 226.6% year-on-year
• Referee fraud (+146.4%) and identity manipulation (+140.4%) also surged last year, as fraudsters target the verification process itself rather than just the paperwork
• Every major category of fraud has fallen slightly in 2026 so far. But fake references, bogus referees and forged payslips all remain above 2024 levels, driven by how easy it is to fabricate convincing documents using AI

In response, Chris Norris – chief policy officer at the National Residential Landlord Association – says: “This report should act as a wakeup 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.”