Malicious tenancy applications could expose the UK’s private rented sector to as much as £4.1bn in direct financial losses each year, according to an analysis of more than one million tenant references.
Research by Goodlord found 41 applications per 1,000 references were flagged for suspected fraud between July 2025 and June 2026. That figure was below a peak of 46.6 per 1,000 in late 2024, although the company said suspected fraud remained well above historic levels.
Goodlord’s calendar-year figures show incidences of suspected fraud increased by almost 40% in 2025 compared with 2024. The company estimated the average direct financial exposure associated with a fraudulent tenancy at £9,601. This figure is based on costs including rent arrears, legal and court fees, bailiff fees, void periods and property damage.
The firm applied the observed suspected fraud rate to an estimated 5.3 million privately rented households in the UK. It assumed an average of two tenant references per household to calculate the potential annual exposure of up to £4.1bn.
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Regional and property price differences
Analysis of confirmed fraud cases found significant regional differences, with London recording a rate almost twice the national average and the highest of any part of the country. The West Midlands had the second-highest confirmed fraud rate, followed by the North West and applications from overseas.
Confirmed 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. These rates were 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 146.4% and identity manipulation increased 140.4%.
Goodlord said every major fraud category had declined slightly so far in 2026, but fake references, bogus referees and forged payslips remained above 2024 levels.
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Industry response to evolving tactics
Nishma Parekh, director of referencing at Goodlord, said: “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.”
She added: “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, said the findings should act as a wake-up call to landlords. He said: “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.”
