AI fuels surge in UK tenancy fraud

AI-generated payslips, employment records and identities are making tenancy fraud harder for landlords and agents to detect.

The warning comes after tenancy platform Goodlord analysed more than one million tenant references submitted over two years.

It found fraudsters were moving beyond individual forged documents with fake employment references increasing by 226.6% during 2025.

That is the fastest-growing type of detected fraud, while referee fraud rose by 146.4% and identity manipulation increased by 140.4%.

Fake identities evolve

Nishma Parekh, the firm’s director of referencing, said: “Rental fraud isn’t newA or hypothetical: we’ve seen fraudsters operating first-hand.

“But what’s changing is how sophisticated fraud has become.”

She added: “Fraudsters are no longer relying on a single forged payslip – they’re building entire fake identities, combined with false employers and invented referees.

“This is why no single verification method is enough on its own.”

Billions at risk

Goodlord found that 41 applications in every 1,000 references were flagged for suspected tenancy fraud between July 2025 and June.

That was below the late-2024 peak of 46.6 in every 1,000, although suspected cases increased by almost 40% during 2025 compared with the previous year.

The firm estimates that a fraudulent tenancy could leave landlords facing average direct financial exposure of £9,601 through arrears, property damage, void periods and possession costs.

Applying its suspected fraud rate across an estimated 5.3 million privately rented households produced a potential annual exposure of up to £4.1 billion.

London fraud hotspot

London recorded confirmed fraud rates almost twice the national average and higher than any other part of the UK.

The West Midlands had the second-highest rate, followed by the North West and tenancy applications from overseas.

Properties with rents above £10,000 a month recorded confirmed fraud rates approaching 18 in every 1,000 applications, between three and six times the rate for average properties.

Every main fraud category fell slightly during 2026, but fake references, bogus referees and forged payslips remained above 2024 levels.

Landlords be vigilant

The National Residential Landlords Association’s chief policy officer, Chris Norris, said: “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.”

He added: “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.”