Landlords and letting agents are facing a growing challenge as artificial intelligence makes it easier for fraudsters to create convincing fake payslips, employment records and identities.
The warning follows an analysis by tenancy platform Goodlord, which reviewed more than one million tenant references submitted over a two-year period. The research suggests that tenancy fraud is becoming increasingly sophisticated, with criminals moving beyond individual forged documents and creating entire false identities.
Fake Employment References Surge
One of the biggest changes identified by Goodlord was the sharp rise in fraudulent employment references.
During 2025, fake employment references increased by 226.6%, making this the fastest-growing category of detected tenancy fraud.
Other types of fraud also recorded significant increases. Referee fraud rose by 146.4%, while identity manipulation increased by 140.4%.
The figures suggest that fraudsters are becoming more organised and are using multiple forms of false information to make rental applications appear legitimate.
Nishma Parekh, Goodlord’s director of referencing, said rental fraud is not a new problem, but the methods being used by fraudsters are becoming much more advanced.
Rather than simply submitting a fake payslip, applicants may now create a complete fictional profile involving a false employer, fabricated referee and manipulated identity documents.
This makes it much harder for landlords and agents to identify suspicious applications through a single verification check.
Billions of Pounds Could Be at Risk
Goodlord’s research found that 41 out of every 1,000 references reviewed between July 2025 and June 2026 were flagged for suspected tenancy fraud.
That figure was below the peak of 46.6 cases per 1,000 references recorded in late 2024. However, the number of suspected cases still increased by almost 40% during 2025 compared with the previous year.
The financial consequences of a fraudulent tenancy can also be significant.
Goodlord estimates that landlords could face average direct losses of around £9,601 per fraudulent tenancy. These costs can include unpaid rent, property damage, periods when the property is empty and expenses associated with recovering possession.
Based on its suspected fraud rate and an estimated 5.3 million privately rented households, Goodlord calculated that potential annual exposure to landlords could reach as much as £4.1 billion.
London Records Highest Fraud Rates
London appears to be particularly exposed to tenancy fraud.
The capital recorded confirmed fraud rates that were almost twice the national average, making it the area with the highest level of detected fraud in the UK.
The West Midlands recorded the second-highest rate, followed by the North West. Applications from overseas applicants were also associated with higher levels of suspected fraud.
Higher-value properties appear to be another area of concern. Homes advertised at rents above £10,000 per month recorded confirmed fraud rates approaching 18 cases per 1,000 applications.
This was between three and six times higher than the rate recorded for properties around average rental levels.
Fraud Remains a Concern Despite Recent Falls
Goodlord’s figures indicate that the main categories of fraud all experienced a small decline during 2026.
However, fraudulent employment references, fake referees and forged payslips remained above the levels recorded in 2024.
This suggests that although the overall rate may fluctuate, landlords and agents cannot afford to become complacent.
The growing availability of AI tools could make it increasingly easy for criminals to produce documents that appear genuine at first glance.
Landlords Urged to Strengthen Referencing
The National Residential Landlords Association (NRLA) has warned landlords to take the issue seriously and ensure their referencing processes keep pace with new technology.
Chris Norris, the NRLA’s chief policy officer, said the findings should serve as a warning to landlords as fraud becomes more sophisticated.
AI tools can now produce convincing documents and other forms of false information with relatively little effort. This means traditional checks may not always be enough to identify a fraudulent application.
Landlords should therefore regularly review the systems and checks they use when assessing prospective tenants.
This could include verifying employment information independently, checking identity details carefully and looking for inconsistencies between different parts of an application rather than relying on a single document.
What Should Landlords Do?
For landlords, thorough referencing is becoming increasingly important as tenancy fraud evolves.
A tenant application that appears genuine on the surface may contain several pieces of fabricated information that have been designed to support one another.
Using more than one verification method can make it harder for fraudulent applications to pass through the screening process.
Landlords who suspect they have been targeted should also report the matter to the relevant authorities, including the police and Action Fraud.
As AI technology continues to develop, fraudsters are likely to find new ways of producing convincing false information. For landlords, keeping referencing procedures up to date could therefore become an increasingly important part of managing risk in the private rented sector.
Download NOW
4 Simple Steps To Becoming Wealthy Through Property