Tenancy fraud is now one of the biggest threats facing UK landlords, and London is the hardest-hit region in the country. Here is how it works, why it is rising fast, and how to protect your property.
Tenancy fraud has become one of the biggest threats to landlords in the UK rental market. With AI tools making it easier than ever to fake documents, and organised groups directly targeting rental homes, landlords face higher risks than at any point on record. As a result, the impact can be brutal: rent arrears, property damage, legal costs, and months of stress.
Just How Big Is the Problem?
The numbers are stark. For example, research from the referencing platform Goodlord suggests tenancy fraud could be exposing the UK rental sector to as much as £4.1 billion in losses a year. For an individual landlord, meanwhile, the average cost of a single fraudulent tenancy is estimated at £9,601 once legal fees, arrears, void periods and damage are added up. On top of that, London has the highest fraud rate of any region in the country.
So if you let property in London, understanding how fraud works, and how to prevent it, is no longer optional. Therefore, this guide explains the most common types of tenancy fraud, why cases are climbing, and how a professional letting agency backed by Goodlord's fraud-prevention technology can protect your investment.
Tenancy fraud is when an applicant uses false information, such as fake payslips, forged IDs or invented employers, to secure a rental property. It is rising sharply because AI now makes convincing fake documents easy to produce. London has the highest fraud rate in the UK at around 6.7 cases per 1,000 applications. The strongest protection is thorough referencing through a professional agency using specialist fraud-detection technology.
The numbers landlords need to see
Source: Goodlord research, 2026.
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What Is Tenancy Fraud?
Tenancy fraud happens when an applicant provides false information to secure a rental property. In practice, this can include fake identity documents, manipulated payslips, false employment details, or hiding previous rental problems such as arrears or evictions.
Notably, fraudsters often target landlords who manage properties alone, because they know the checks are usually lighter. A self-managing landlord doing a quick eyeball check of a payslip at a viewing is a far easier target than an agency running documents through specialist verification software.
Tenancy fraud is any attempt to rent a property using false or manipulated information. The goal is usually to pass affordability and identity checks the applicant would otherwise fail, whether to secure a home they cannot afford or, in more serious cases, to use the property for criminal purposes.
The Most Common Types of Tenancy Fraud
Fraud comes in several forms, and increasingly they are combined into one convincing fake application. Below, here are the main types every landlord should recognise.
1. Identity fraud
First, fraudsters use stolen or fake IDs to hide their real identity. This includes forged passports, altered driving licences, or digitally created documents. Worryingly, Goodlord now reports that criminals are now using AI to build entire fake identities, complete with matching documents, rather than forging a single item.
2. Income and employment fraud
Indeed, this is one of the fastest-growing types. Typically, applicants submit fake payslips, false employment letters, or even set up fake companies to appear financially stable. Fake employment references alone surged by 226% in the last year. Payslip fraud has long been the single most common tactic, precisely because affordability is the check that matters most.
3. Address and rental history fraud
Similarly, applicants hide previous arrears, evictions or disputes by providing false landlord details, or by using a friend posing as a previous landlord. A glowing reference from a "landlord" who is really a mate is surprisingly common, and hard to catch without proper verification.
4. Subletting fraud
In this case, a tenant passes referencing, moves in, then immediately sublets the property, often through short-let platforms. This leads to overcrowding, damage and serious compliance risks, and you may not discover it until something goes badly wrong.
5. Deposit and payment fraud
Finally, this involves fake bank transfer screenshots, chargeback attempts, or fraudulent deposit payments designed to trick a landlord into handing over keys before the money has genuinely cleared. Always confirm funds have actually arrived, not just that a screenshot says so.
| Fraud type | What it looks like | Main risk |
|---|---|---|
| Identity fraud | Fake or stolen ID, AI-built identities | Unknown, untraceable occupant |
| Income fraud | Doctored payslips, fake employers | Rent arrears you cannot recover |
| Rental history fraud | Fake landlord references | A hidden history of arrears or eviction |
| Subletting fraud | Property re-let on short-let sites | Damage, overcrowding, compliance breaches |
| Payment fraud | Fake transfer screenshots, chargebacks | Handing over keys with no real payment |
Why Tenancy Fraud Is Increasing
Meanwhile, several forces are pushing fraud to record levels at once. Understanding them shows why old-fashioned manual checks are no longer enough.
- AI and digital editing tools. Fabricating a convincing payslip once took skill. Now a template, a free image editor and twenty minutes can fool an untrained eye.
- Remote lettings. More applications happen online with no face-to-face meeting, which removes a natural layer of verification.
- Economic pressure. High rents push some genuine applicants who cannot quite afford a property to inflate their income to secure it.
- Organised crime. Some groups target rental properties deliberately, for profit or to use as a base for illegal activity.
The result is fraud that is more advanced and much harder to spot. As Goodlord puts it, fraudsters are no longer relying on a single forged payslip. They are building entire fake identities, combining false employers with invented referees. That means the goal has shifted from spotting one red flag to spotting patterns across the whole application.
The uncomfortable truth: because fake documents now look so real, the "eyeball test" at a viewing should be your last line of defence, never your only one. If a payslip is your sole check, you are relying on luck.
Why London Landlords Are Most at Risk
However, if you let property in London, this matters to you more than to almost anyone else in the country. London records the highest confirmed fraud rate of any UK region, at around 6.7 cases per 1,000 applications. The next highest, the West Midlands, sits well behind at 3.5.
There is a second reason London landlords are exposed. In addition, fraud rises sharply with rent value. Homes renting for more than £10,000 a month see confirmed fraud rates approaching 18 per 1,000 applications, several times the average. With London's higher rents across the board, the capital is simply a bigger, more attractive target.
In particular, for East London landlords in areas like Hackney, Tower Hamlets, Newham and Waltham Forest, where demand is high and applications come in fast, the pressure to fill a property quickly can be exactly the moment a rushed check lets a fraudulent application slip through.
London combines the two things fraudsters look for: a high volume of applications and high rents. That means more attempts and a bigger payoff for each successful fraud. It is why London landlords, and their agents, need the strongest checks in the country, not the lightest.
Letting a property in East London? Make sure every applicant is who they say they are.
Red Flags Every Landlord Should Know
While no single sign proves fraud, certain patterns should prompt a closer look. Therefore, watch for these during an application.
- Reluctance to use Open Banking. Genuine applicants usually cooperate. Refusing digital income verification is a common warning sign.
- Payslip errors. Wrong tax codes, missing sections, or no clear net and gross pay figures often point to a doctored document.
- Pressure to move fast. An applicant pushing to skip checks and pay several months upfront in cash deserves extra scrutiny, not less.
- References that feel too perfect. A previous "landlord" who answers instantly and gushes with praise may be a friend, not a landlord.
- Mismatched details. Names, addresses or dates that do not quite line up across documents are worth questioning.
- Screenshots instead of proof. A screenshot of a bank transfer is not the same as cleared funds in your account.
Remember: a referencing "pass" is not proof of identity. Fraudsters build applications specifically to pass surface checks. Strong verification and healthy vigilance still matter.
How Goodlord Helps Prevent Tenancy Fraud
At Homefinders, we use Goodlord because it provides one of the strongest fraud-prevention systems in the UK. Its technology catches issues that traditional referencing simply cannot, combining automated checks with expert human review.
Goodlord's fraud-prevention features
- Advanced digital ID verification. Documents are checked against secure databases to detect fake or stolen identities.
- AI-powered document analysis. Payslips, bank statements and employment letters are scanned for manipulation, inconsistencies and digital tampering.
- Income and employment cross-checks. Goodlord verifies employers, checks company legitimacy, and confirms salary details through trusted sources.
- Fraud pattern detection. The system flags suspicious behaviour, repeated attempts and known fraud indicators across its wider network.
- Expert human review. Referencing specialists manually investigate anything unusual, often catching fraud that automated systems miss.
Ultimately, this combination of technology and human expertise is exactly what the current wave of fraud demands. When fraudsters build entire fake identities, you need checks that look for patterns across the whole application, not just one document at a time. Detection rates speak for themselves: verification systems now catch the large majority of forged payslips and fake employment references.
↑ Back to topWhy Working With a Professional Agency Matters
Fraudsters target independent landlords precisely because they know the checks are easier to bypass. Fortunately, working with an agency changes that equation. With Homefinders, you benefit from:
- Full Goodlord referencing and fraud detection on every applicant.
- Compliance-ready processes that stand up to scrutiny.
- Trained staff who recognise red flags in documents and behaviour.
- Consistent verification of identity, income and rental history.
- Protection against subletting and illegal occupation.
In short, we do not just find tenants. We protect your property and your income. In a market where a single fraudulent tenancy can cost nearly £10,000, that protection pays for itself many times over.
Tenancy fraud is rising, and it is becoming more organised and more convincing. But you do not have to face it alone. With a professional agency and Goodlord's fraud-prevention technology behind you, you can let your property with genuine confidence and cut your risk dramatically.
Frequently Asked Questions
Here are the questions landlords ask most about tenancy fraud. First, the basics. After that, prevention and practical steps.
Understanding the risk
What is tenancy fraud?
Tenancy fraud is when an applicant uses false or manipulated information to secure a rental property. For instance, common examples include fake payslips, forged identity documents, invented employers and false landlord references. The aim is usually to pass affordability or identity checks the applicant would otherwise fail.
How common is tenancy fraud in the UK?
It is rising sharply. In fact, Goodlord flagged around 41 applications per 1,000 for suspected fraud between July 2025 and June 2026, and suspected fraud rose almost 40% during 2025. The sector's estimated annual exposure is around £4.1 billion, making this one of the biggest current threats to landlords.
Which area has the most tenancy fraud?
London has the highest confirmed fraud rate in the UK, at around 6.7 cases per 1,000 applications, well ahead of the West Midlands at 3.5. Notably, higher-value properties are targeted most, with homes over £10,000 a month seeing rates approaching 18 per 1,000.
How much does tenancy fraud cost a landlord?
The average direct cost of a single fraudulent tenancy is estimated at £9,601. In total, that figure combines legal fees, court and bailiff costs, rent arrears, void periods and property damage. For most landlords, that is far more than the cost of thorough professional referencing.
Preventing fraud
What is the most common type of tenancy fraud?
Payslip and income fraud has long been the most common tactic, because affordability is the check that matters most. However, fraud is now shifting towards entire fake identities that combine doctored documents, false employers and invented referees, so landlords now need to look for patterns, not single red flags.
How can landlords prevent tenancy fraud?
The strongest protection is thorough referencing through a professional agency using specialist fraud-detection technology. In practice, that means digital ID verification, AI document analysis, income and employer cross-checks, and human review. Watch for red flags too, such as reluctance to use Open Banking or payslips with errors.
What are the warning signs of a fraudulent tenant?
For example, warning signs include refusing Open Banking checks, payslips with wrong tax codes or missing details, pressure to skip checks and pay months upfront in cash, references that seem too perfect, mismatched details across documents, and transfer screenshots offered in place of cleared funds.
Does tenant referencing guarantee there is no fraud?
No. Importantly, a referencing "pass" reduces risk but is not proof of identity, because fraudsters design applications to pass surface checks. That is why layered verification and human review matter, and why vigilance from your agent throughout the process is still essential.
Is it safer to use a letting agent than to self-manage?
For fraud protection, generally yes. After all, fraudsters target independent landlords because checks are often lighter. A professional agency runs consistent, technology-backed verification on every applicant, recognises red flags, and keeps your processes compliant, which independent landlords find harder to match alone.
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