Fraudsters are using AI to create entire fake tenant identities - complete with bogus employers, doctored ID and invented referees - to slip past referencing checks.

Goodlord found fake employment references surged 226% last year, while referee fraud and identity manipulation also rose sharply as criminals targeted the verification process rather than simply forging individual documents.

Its analysis reveals that 41 tenancy applications per 1,000 references were flagged for suspected fraud between July 2025 and June 2026, with incidences of suspected fraud up by almost 40% during 2025 compared with the previous year.

It reports that although every major category of fraud has fallen slightly in 2026 so far, fake references, bogus referees and forged payslips all remain above 2024 levels, driven by how easy it is to fabricate convincing documents using AI.

Estimates

Using estimates for legal costs, court fees, bailiff fees, rent arrears, void periods and property damage, it reckons landlords would take an average £9,601 hit when impacted by a fraudulent tenancy. 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 – it suggests fraudulent tenancy applications could expose the sector to up to £4.1 billion in direct financial losses each year.

London is the UK’s fraud epicentre, with confirmed fraud rates almost twice the national average and higher than anywhere else in the country, followed by the West Midlands, the North West and overseas tenancy applications.

Industry

Nishma Parekh, director of referencing at Goodlord, says 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.

“This report should act as a wakeup call for landlords across the sector,” agrees NRLA chief policy officer, Chris Norris (pictured). “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.

“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.”

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