According to recent industry data, tenant fraud is surging – potentially exposing the UK rental market to a staggering £4.1 billion in financial losses every year.
With the average fraudulent tenancy costing a landlord around £9,601 in legal fees, unpaid rent, and property damage, this is becoming a costly problem for landlords.
Here’s what you need to know about how scammers are operating today – and exactly how you can help protect your investment.
What is tenant fraud?
At its core, tenant fraud is when someone applying to live at your property intentionally provides false information or fake documents to secure a lease.
It’s more than a minor exaggeration on an application form. It involves presenting forged payslips, supplying fake landlord references, and even creating an entirely fabricated identity to trick you into handing over the keys to your property.
Tenant fraud is evolving
New data from letting agent platform Goodlord reveals that tenant fraud is rapidly changing. The false information some tenants provide is becoming more sophisticated and difficult to spot.
This is largely due to advancing AI technology. Fake photos, payslips, and even identities are much easier to make – and harder to spot.
However, the research from Goodlord shows higher value rentals (those costing over £10,000 a month) are being targeted more often. It also reveals London is currently the area in the UK where tenant fraud happens most frequently. Though it’s closely followed by the West Midlands and the North West, which also saw higher than average levels of tenant fraud.
The 3 fastest-growing tenant scams
1. Fake employment references (up 226%)
Fake employment references, where a tenant creates a fake employer who gives a false reference, is the fastest growing type of tenant fraud. And it’s evolving beyond having a friend pretend to be an old boss or creating a fake email address.
Scammers are able to find real company email addresses along with authentic looking payslips – and create a very convincing reference.
Goodlord shared that major institutions like the NHS had been targeted in these scams, making the references seem more legitimate.
2. False landlord references (up 146%)
Much like fake employment references, this involves an applicant providing contact details for a former landlord who is actually an accomplice. The landlord will confirm the prospective tenant is reliable and treated their property well, and you’ll be none the wiser.
This type of scam is evolving too. Voice changing technology is more accessible and AI image creation means the identities of these fake landlords can be more fleshed out. Fake images, social media accounts, and even documents like tenancy agreements are easier to create.
3. Fabricated identities (up 140%)
Instead of just stealing someone’s identity, scammers are building new ones from scratch. They blend real details (like a genuine address) with a fake name and date of birth to create a clean credit history, backed up by doctored passports and documents.
What causes tenant fraud?
Lots of tenant fraud occurs because someone what’s to give themselves a better chance of securing a property that’s out of their price range. This type of fraud can lead to rent arrears and potentially drawn out evictions.
But illegal subletting is always something to watch out for. This happens when your tenant rents out all or part of your property to someone else without your knowledge or written consent.
A tenant might commit fraud to secure an expensive, bigger property – then make money themselves by charging another tenant a premium. Not to mention all the complications illegal subletting can cause your landlord insurance and mortgage terms, leaving you exposed if damage occurs.
How you can help protect yourself
If your referencing process hasn’t changed in the last few years, it’s worth considering a few things:
- stop relying on paper and phone calls – a reference from a real company name isn’t enough anymore. Instead of taking an email or phone call at face value, use referencing services that connect directly to trusted sources. Tools like Open Banking can prove a tenant actually paid rent to a previous landlord, and direct checks with HMRC can verify their true income
- use smart ID checks – don’t just look at a passport and assume it’s real. Modern digital identity checks use facial recognition and police databases to confirm the person applying genuinely matches their official documents
- trust your instincts – if something feels off about an application, challenge it early, and question anything you’re unsure about
- report it immediately – if you catch a fraudster, don’t just reject the application and move on. Industry experts advise reporting suspected fraud to the police and Action Fraud straight away to help protect the wider community
More guides for buy-to-let landlords
- How to get a buy-to-let mortgage: a simple guide
- What do landlords need to know about the How to Rent guide?
- Delays to new energy efficiency standards for rental properties
- What does accidental damage insurance cover?
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