Tenant Fraud Could Cost Landlords £4.1bn a Year — New Data

Tenant referencing used to be about spotting an obviously doctored payslip. That is no longer the game being played.

What the research found

Goodlord analysed data from over a million tenant references across two years. The findings:

• 41 applications per 1,000 flagged for suspected fraud between July 2025 and June 2026
• Down from a peak of 46.6 per 1,000 in late 2024, but still well above historic levels
• Referee fraud rose 146.4% and identity manipulation 140.4% over the last year
• Potential exposure to the sector of up to £4.1 billion annually

Every major fraud category has fallen slightly during 2026 so far. But fake references, bogus referees and forged payslips all remain above 2024 levels, driven by how easy AI has made it to produce convincing documents.

The shift that matters

This is the part landlords should take seriously.

Fraudsters are moving away from submitting a single forged document and towards building an entire fake identity — combining bogus employers, doctored ID and invented referees to get through the referencing process as a whole.

They are targeting the verification process itself, not just the paperwork. That is why the referee fraud figure matters most: if the person you ring to check the payslip is also part of the fabrication, checking the document proves nothing.

Chris Norris, chief policy officer at the NRLA, described the findings as a wake-up call for landlords.

Higher-value properties are hit hardest

A striking finding: 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 across average rental properties.

The logic is straightforward. The higher the rent, the greater the prize, and the more effort a fraudster will invest in a convincing package.

But do not conclude that ordinary lets are safe. At 41 per 1,000 across the board, roughly one in every 25 applications is being flagged.

Why this costs more than it used to

Getting a fraudulent tenant through referencing has always been bad. Since 1 May 2026 it is considerably worse.

Section 21 is gone. There is no no-fault route to remove someone who lied their way in. Possession requires a Section 8 ground, evidence, and a court hearing — see our guide on how possession works now.

So the arithmetic has changed. Under the old system a bad tenant meant a few months of arrears and a Section 21 notice. Now it can mean the better part of a year, court costs, and arrears you are unlikely to recover from someone whose identity was invented.

Referencing has moved from a routine administrative step to your main line of defence.

What actually catches fabricated applications

The common thread is simple: verify at source, never from the document. A perfect-looking PDF proves nothing.

1. Ring the employer on a number you found yourself. Company website or Companies House — never the number printed on the payslip or supplied by the applicant. This single step defeats most referee fraud.
2. Check the employer exists on Companies House. Look at incorporation date, filing history and directors. A company registered three months ago is worth a second look.
3. Use Open Banking rather than PDF bank statements. A live read-only feed cannot be edited. This is the single biggest upgrade available to most landlords.
4. Verify the previous landlord owns the property via Land Registry. A friend posing as a landlord is one of the oldest tricks and still works.
5. Use the Home Office online right to rent service with the applicant’s share code rather than accepting document images. From 1 October 2026, any digital provider you use must be government-registered.
6. Take a guarantor where referencing is thin, and reference the guarantor properly too.

None of that requires expensive software. It requires making three phone calls to numbers you sourced independently.

Warning signs worth noticing

• Pressure to move quickly, with an offer to pay several months up front
• A referee who only answers a mobile and is oddly available
• Payslips with round numbers, or formatting inconsistent between months
• An employer with no online presence beyond a recently built website
• Reluctance to use Open Banking or provide a share code
• Documents supplied late at night in response to a deadline

Any one of these alone means little. Two or three together justify slowing down.

Do this without discriminating

Important caveat. Heightened fraud awareness must not become selective scrutiny.

Apply the same checks, to the same standard, to every applicant. Deciding who gets the full verification treatment based on name, accent or nationality is discrimination, and the Renters’ Rights Act strengthened enforcement around exactly that.

Write your process down and follow it identically every time. A consistent process is both better fraud protection and your defence against a discrimination claim. See our guide on lawful and unlawful tenant screening.

Frequently asked questions

How common is tenant fraud?

Around 41 applications per 1,000 were flagged for suspected fraud between July 2025 and June 2026 — roughly one in 25. Higher-value lets see confirmed rates several times above average.

Can I spot an AI-generated payslip?

Increasingly, no — and you should not try. Verify with the employer directly using a number you sourced yourself. Document inspection is no longer a reliable test.

What is Open Banking and should I use it?

It lets an applicant grant temporary read-only access to their bank data rather than sending PDFs. Because the data comes straight from the bank it cannot be edited. Most referencing providers now offer it, and it is the strongest single improvement available.

What if I discover fraud after the tenancy started?

Take legal advice quickly. Fraudulent misrepresentation may give grounds to challenge the tenancy, and it should be reported to Action Fraud. Do not attempt to remove anyone without a court order — illegal eviction is a criminal offence regardless of how the tenancy was obtained.

Does a guarantor protect me?

Only if the guarantor is real and solvent. Reference them as thoroughly as the tenant — fabricated guarantors are part of the same pattern.

My agent does referencing — am I covered?

Ask what they actually verify and how. Some check documents only. Ask specifically whether they contact employers on independently sourced numbers and whether they offer Open Banking.

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• Right to Rent digital checks — what changes 1 October
• Do landlords need to review guarantor agreements?