Tenant application fraud averages 41 cases per 1,000 references, with London’s high-rent lets most exposed

Goodlord’s latest analysis puts suspected tenancy application fraud at 41 cases per 1,000 references across July 2025 to June 2026, and says fraud volumes were around 40% higher in 2025 than in 2024. For London landlords, the key point is that fraud is no longer limited to forged payslips or a borrowed passport. It can involve fabricated identities, manipulated ID documents and invented employers or referees, meaning a basic referencing pass may not be enough on its own.

What the reported losses could look like in practice

Goodlord estimates the average direct loss per fraudulent tenancy at £9,601, with potential sector-wide exposure of £4.1 billion a year. As the source summary does not break down that £9,601 into arrears, legal costs, damage or void periods, it is best treated as an aggregate estimate rather than a standard claim value. Even so, on a London flat at £2,200 pcm, four months of unpaid rent would be £8,800 before legal fees, cleaning, repairs or remarketing costs.

Where the risk is highest

Goodlord identifies London, the West Midlands and the North West as fraud hotspots, and says the highest risk sits in properties renting for more than £10,000 pcm. That is particularly relevant in higher-value London markets, where fast-moving relocations and polished applicant paperwork can make fraudulent applications harder to spot.

For single-property landlords, one bad tenancy can wipe out annual profit. For portfolio landlords and letting businesses, the bigger issue is often a weak process repeated across multiple applications.

There is no new legal deadline, but processes need updating

The source does not point to any new statutory deadline or legal change. But if your current process relies mainly on emailed PDFs, a quick credit check and one employer reference accepted at face value, it may be too easy to defeat.

A stronger approach is a multi-layer verification process:

• inspect original ID where appropriate
• use a reputable electronic identity check
• keep a time-stamped record of what was checked, when and by whom
• ask your agent or referencing provider what fraud-detection tools are included

That evidence trail may matter later if there is an insurance claim, possession case or fraud report.

Verify employment and income through independent channels

Payslips alone are no longer enough for higher-risk applications. A safer process is to verify employment using contact details sourced independently, such as:

• the employer’s official website
• a published switchboard number
• the relevant company entry at Companies House

Where available, landlords and agents can also ask for additional evidence such as bank statement review or other payroll corroboration, rather than relying only on emailed PDFs. If an applicant claims to work for a business with no obvious public footprint, that is not proof of fraud, but it is a sensible point for escalation.

Referee checks should be more than an email

A written reference from a free email address should not be treated as strong evidence on its own. A more robust process is to:

• contact referees using independently sourced details
• speak to them directly by phone
• record the date, number called and outcome

Cross-checking whether the referee is genuinely linked to the employer or business named in the application can help expose invented contacts.

Right to Rent checks are separate and still mandatory

Right to Rent checks remain a separate legal requirement and must still be carried out in line with Home Office guidance. Depending on the applicant’s status, that may mean a manual check, an online Home Office check, or use of an authorised Identity Service Provider route where permitted.

A Right to Rent check is not a full anti-fraud system, but weak ID handling can create both fraud risk and immigration compliance risk. Landlords should also keep the required copies and records of the check.

Know the deposit cap before asking for more protection

The source suggests stronger protections such as guarantors, advance rent, insured rent guarantee products and enhanced credit checks. That can be sensible, but landlords must stay within the Tenant Fees Act 2019 rules on deposits.

The tenancy deposit cap is usually:

• five weeks’ rent where annual rent is below £50,000
• six weeks’ rent where annual rent is £50,000 or more

So on a property at £4,500 pcm, annual rent is £54,000, meaning the maximum tenancy deposit is six weeks’ rent. Taking more than that would risk breaching the Act. If extra protection is needed, a properly referenced guarantor or suitable insurance product may be more realistic than attempting to take an unlawful deposit.

What to do if you suspect fraud

If fraud is suspected, preserve evidence first. That may include:

• application emails
• submitted documents
• viewing notes
• call records
• tenancy-signing records
• platform logs held by your software provider, where available

The source attributes to the NRLA the recommendation to report suspected fraud to the police and Action Fraud. Landlords should also notify insurers promptly and check whether their policy actually covers fraud, rent arrears, malicious damage or legal expenses.

If personal data is involved, keep records secure and handle them in line with UK GDPR requirements.

Train staff to spot warning signs

For managing agents and self-managing landlords with staff, training matters as much as software. Teams should know the common warning signs, including:

• inconsistencies in document formatting
• unusual shadows or edits on ID images
• recently created employer domains
• references that avoid live contact
• bank statements that do not align with stated income

A written checklist used on every application is usually more defensible than ad hoc judgement.

Three practical actions to take now

1. Within 7 days, map your application process from enquiry to move-in and identify where documents are accepted without independent verification.
2. Before the next tenancy offer, require stronger identity, employer and referee checks for every adult applicant.
3. Within 30 days, review insurance terms, rent guarantee conditions and document retention so you can evidence your checks if a claim or report follows.

This article is general information, not legal advice.