Fraudulent tenancy applications could be exposing the UK’s private rented sector to up to £4.1 billion in financial losses every year, Goodlord research reveals.

Goodlord’s research analysed data from over a million tenant references over the last two years and found that 41 tenancy applications per 1,000 references were flagged for suspected fraud between July 2025 and June 2026.

While this is down slightly from a peak of 46.6 per 1,000 references in late 2024, suspected fraud remains well above historic levels.

Overall, incidences of suspected fraud increased by almost 40% during 2025 compared with the previous year, underlining that tenancy fraud remains a growing challenge despite recent improvements.

To estimate the potential financial impact, Goodlord combined its observed suspected fraud rate with publicly available estimates for legal costs, court fees, bailiff fees, rent arrears, void periods and property damage.

The analysis estimates the average direct financial exposure associated with a fraudulent tenancy at £9,601.

Applying the current suspected fraud rate across the UK’s estimated 5.3 million privately rented households, while assuming an average of two tenant references per household, suggests fraudulent tenancy applications could expose the sector to up to £4.1 billion in direct financial losses each year.

Looking on a regional basis, London is the UK’s fraud epicentre, with confirmed fraud rates almost twice the national average and higher than anywhere else in the country.

The West Midlands follows with the second-highest confirmed fraud rate, followed by the North West and overseas tenancy applications.

The most expensive properties are the biggest fraud targets as homes renting for more than £10,000 a month see confirmed fraud rates approaching 18 per 1,000 applications.

This is three to six times higher than the rate of confirmed fraud seen across average rental properties.

Research also reveals that fraudsters are moving away from a single forged document and towards building an entire fake identity.

Fake employment references were the fastest-growing type of fraud in 2025, up 226.6% year-on-year, while referee fraud (+146.4%) and identity manipulation (+140.4%) also surged last year, as fraudsters target the verification process itself rather than just the paperwork.

Data found that every major category of fraud has fallen slightly in 2026 so far, but fake references, bogus referees and forged payslips all remain above 2024 levels.

Goodlord director of referencing Nishma Parekh says: “Behind these numbers are real people and real money: landlords left out of pocket, agents’ time wasted, and honest tenants competing against fraudulent applicants for homes.”

“Rental fraud isn’t new or hypothetical: we’ve seen fraudsters operating first-hand. But what’s changing is how sophisticated fraud has become. 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. As trusted, independently verified data – such as direct-to-source income verification – becomes the norm, fraudsters adapt around it.”

“The industry needs to move from spotting one red flag to identifying patterns across the referencing journey – and to consistently review those checks, as fraud tactics evolve”.

In the July issue of Mortgage Strategy, Mortgage Finance Brokers business development director Jeni Browne discussed tackling tenancy fraud.