Rental fraud is increasingly high on the agenda of private landlords.
What was once a background problem is now a frontline problem, shaped by legislative changes, economic pressures and increasingly sophisticated counterfeiting techniques.
For mortgage brokers advising landlords, understanding this landscape – and knowing how to respond to it – is becoming an increasingly important part of the value we add.
The data tells a clear story. Rental fraud is estimated to cost UK landlords £266 million a month, with most unable to recover their losses. Goodlord research, which compared more than 300,000 rental applications, found that detected fraud had increased from just over one case per 1,000 applications in 2022 to 2.9 cases per 1,000 in 2023 – an increase of 140% year on year.
Manipulated bank statements are the most common tactic
About 94% of fraud cases involve forged documents, with forged bank statements being the most common tactic. The Cifas Fraudscape 2026 report adds even more weight to the picture. In 2025, more than 444,000 cases were registered in the National Fraud Database – the highest number in one year. Within this, tenant referral cases increased by 263 cases – a notable increase that reflects growing awareness among referral professionals about fraud attempts at the application stage.
Traditional document-based references – such as pay stubs or bank statements – are becoming less and less reliable as AI tools can now generate highly convincing fraudulent documents in minutes.
More exposed than ever
The fraud data would be concerning in any environment. Under the Renters’ Rights Act 2025, the stakes are significantly higher. Now that Article 21 has been abolished, landlords can no longer recover possession without a specific legal basis. Article 8 notice periods have been extended – in many scenarios by up to four months.
Backlogs at the court mean that possession proceedings can take considerably longer than the notice period alone suggests. For a landlord who has unknowingly placed a fraudulent tenant, the practical implications are serious: a lengthy possession process, possible rent arrears and limited recovery options.
Estate agents who address this as part of the consultation with the landlord will be better positioned – and so will their clients
There is also a possession route available in such circumstances – Ground 17 of the Housing Act, which applies where a lease has been obtained by false representation – but this is discretionary, requires clear evidence and is far from a guaranteed or quick solution.
About 20% of respondents from a recent survey with landlords reported being victims of illegal subletting, and 8% reported being victims of false financial information provided by potential tenants. In addition to financial loss, a fraudulent lease can expose a landlord to serious complications – from property being used for illegal purposes to significant damage.
Protections
The good news is that robust referrals, when applied consistently, significantly reduce exposure.
Best practice now involves multiple layers. Identity verification should be the starting point; passport or driving license checks, and not just photocopies. Professionally referring tenants to an established provider is essential; self-reference is always inadequate. Employment and income must be independently verified.
What was once a background problem is now a frontline problem
The sector is shifting towards instant data verification, including Open Banking, HMRC income validation and forensic analysis of financial data – all of which are significantly more difficult to falsify than a PDF payslip. If a prospective tenant refuses Open Banking, that refusal in itself is worth an investigation. References from previous landlords should be taken directly, and ideally from a landlord before the current one.
Landlords must also keep detailed records of each check. Insurers increasingly expect evidence of reasonable due diligence.
Real estate agents may not refer to specialists, but they are often a trusted professional in a landlord’s environment. That creates a real opportunity.
Brokers can play a valuable role in raising awareness of the fraud landscape at the right time – when a landlord is taking on a new property, refinancing or restructuring a portfolio. A conversation about lenders’ requirements and the verification of rental income naturally ties into a broader discussion about how that rental income is generated and protected. Recommending reputable reference providers, identifying the shift to Open Banking verification and identifying the underwriting dimension of inadequate due diligence are all areas where a broker can add tangible value.
Professionally referring tenants to an established provider is essential
Tenant fraud is not a niche risk. It is a growing, data-based problem that has become significantly more serious due to recent changes in the law. Agents who address it as part of the consultation with the landlord will be better positioned – and so will their clients.
Jeni Browne was bornDirector of Business Development at Mortgage Finance Brokers
This article appeared in the July/August 2026 edition of Mortgage strategy.
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