Why tenant referencing just got a whole lot more important

By Tom Entwistle

Tenant referencing has just got a whole lot more complicated and necessary – make sure you get it right.

For as long as I've been letting property, referencing has been a priority for me after an early bad experience. The first residential property I let was assigned by an agent, but I soon started to do my own tenant selection. 

I don’t blame the agent entirely, as in those days referencing was treated as something agents worked through quickly before getting to the business of signing the tenancy agreement – after all, commission was their strong motivation. The tenant turned out to be one of the worst ones I ever had, not a great introduction to becoming a landlord.

But now and more recently the landscape has changed dramatically. Under the Renters' Rights Act (RRA) 2025, a casual approach to tenant checks and referencing can become a genuine liability. With Section 21 gone and the possession process now running through a Section 8 ground and, where contested, a court hearing, the cost of accepting the wrong tenant has risen sharply. 

At the same time, rental application (ID) fraud is said to be climbing dramatically, and the right to rent penalties have also become considerably more expensive if you take on a wrong tenant. Referencing is no longer just a formality to be got through; it’s the landlord's main line of defence against a nightmare experience.

This article concerns the law in England. It is intended as general guidance and does not constitute legal advice. Landlords should seek professional advice on their individual circumstances before relying on any of this information. 

A wrong tenant now costs a lot more to remove

The practical consequence of the RRA's reformed possession process is not difficult to comprehend; mistakes made in the selection process take a long time to recover from. 

Ending a tenancy that goes wrong with rent arrears, breach of agreement, or a tenant who was never who they claimed to be now involves establishing a Section 8 ground for an eviction and, if the tenant does not leave voluntarily, proving that case in court. 

Some grounds are discretionary, adding to the uncertainty, but none of this is a reason to panic; it simply changes the arithmetic and the determination to do comprehensive referencing. Time spent on referencing at the outset is now considerably cheaper than time spent recovering possession later. 

I've covered the mechanics of the new eviction process in detail elsewhere on this site, so I won't go over that ground here. The point of this article is simply to highlight the importance of a modern referencing process and what good tenant checks and referencing involves. 

The new fraud landlords are up against

The referencing platform Goodlord, which processes a large volume of UK tenancy applications, has reported that fraudulent rental applications rose sharply over the past year, and that the great majority of fraudulent applications identified involved forged supporting documents. These include passports, driving licences, payslips, bank statements and landlord references.

Many of these forgeries are so good and sophisticated that they defeat even the authorities, and a straightforward visual check gives you little chance of spotting a fraudulent document.

During an analysis of 300,000 tenancy applications, Goodlord found that fake or doctored payslips made up around half of the fraudulent cases it identified. So, income manipulation through forged documentation was the single most common act of fraud. 

This isn't just a story about criminal behaviour. Some of it is opportunistic because of the difficulty of obtaining tenancies and increasingly rising rents. Tighter affordability thresholds are causing a minority of otherwise honest applicants to inflate their income levels or colour up a shaky employment record to get over your screening hurdles. 

Either way, the practical implications for landlords of a good or forged document remain the same: a convincing-looking document that can entice you to take the wrong tenant, so this check is no longer a reliable basis for a decision.

A recent BBC Panorama investigation featuring Paul Shamplina of LandlordAction.co.uk into rental fraud, broadcast in July 2026, put the spotlight on how organised criminal activity has become a part of the rental market.

Paul Shamplina was quoted in the coverage of the programme as saying that referencing reduces risk, but a pass does not amount to proof of identity. That distinction now matters more than ever.

Right to rent, the added risk

Running alongside the fraud problem is a separate but related risk for landlords: the risk and fines involved if you get the right-to-rent check wrong. Civil penalties for right-to-rent breaches were substantially increased from February 2024, with first-breach penalties of up to £5,000 per lodger and £10,000 per occupier, rising to £10,000 and £20,000, respectively, for repeat breaches and the possibility of criminal prosecution.

You could even get up to five years' imprisonment and an unlimited fine if you knowingly let to someone without the right to rent approved status. It has been reported that there’s been a substantial rise in penalty notices issued since the increase took effect, actual figures yet to be confirmed by an official Home Office release.

There’s also an ongoing liability with right-to-rent as the RRA now adds a further wrinkle. Where a tenant's right to rent lapses during the tenancy, this can now trigger a mandatory possession ground, meaning the two systems, immigration compliance and the tenancy itself, are linked together. 

There's a wider point worth flagging up here as well. The RRA's civil penalty framework, published in the government's guide to the Act, sets a structure of penalties of up to £7,000 for minor or first-time non-compliance and up to £40,000 for serious or repeat breaches across the full range of landlord obligations.

From 1 October 2026, any third-party provider offering digital right-to-rent checks must be registered on the Office for Digital Identities and Attributes register under the Data Use and Access Act 2025. This is a change covered in more detail in a separate piece on this site. If you use a digital checking service, it's worth confirming your provider meets this new requirement.

What does IDVT actually do?

This acronym (IDVT), Identity Document Validation Technology, has become centrally relevant to ordinary referencing practice rather than remaining a niche compliance tool offered by just a few reference agencies.

IDVT platforms provided by government-approved Identity Service Providers will now combine several checks that a manual review simply cannot achieve. Biometric facial matching against a photo presented on a submitted document, liveness detection to confirm a real person is present rather than a static image or recording, and, in some cases, direct reading of the chip data embedded in passports are all part of the service.

Many of the providers will also do a cross-reference of submitted documents against police and government databases to flag against genuine ID items reported lost, stolen or fraudulent. You should enquire about what your provider actually does.

This technology is not perfect. You should understand the limits of these modern reference agency checks as well as their strengths. Even where IDVT confirms a document is genuine, best practice still calls for some form of “imposter check”.

Before letting a property to anyone, you should always conduct an in-person interview or, at the very least, a video meeting to confirm the applicant is in fact the person the verified document belongs to. Document validation and identity verification are related but are two distinct problems. You must not conflate these two important aspects of tenant verification.

If you are choosing a referencing provider, the one non-negotiable qualification is certification under the government's Digital Identity and Attributes Trust Framework (DIATF). This is the accreditation that demonstrates a provider meets the required data protection and security standards. It means you can rely on the service for your statutory excuse under Right to Rent Act law.

After ID, verifying employment, income and history

IDVT solves one part of the referencing equation. It confirms a document is genuine and belongs to the person presenting it to you. But identity (ID) is only one of the four pillars of proper referencing. Credit history, residential history and employment (income or affordability) represent the other three. 

Given how much fraud often centres on fraudulent payslips, it's worthwhile for landlords and agents paying particular attention to income verification. Three or six months of bank statements will usually be enough to show how overtime, wages and salaries have been paid in. 

More reference agencies are now offering open banking checks, where an applicant grants read-only access to recent bank transaction history to verify the claimed salary payments. Some even verify income against HMRC payroll data with the applicant's consent. Again, neither of these methods is foolproof, but both no longer rely on one document, which can easily be forged. 

What should landlords and agents be doing themselves?

You must use a referencing provider whose IDVT service is DIATF-certified and confirm any digital right-to-rent provider meets the DVSP registration requirement from October 2026.

Don't rely on your own visual inspection of documents alone. Referencing and ID are multi-faceted processes which consider the many aspects in the process. 

Where possible, income should be verified at source (open banking, bank statements or payroll data) rather than from just a submitted payslip.

The employer's reference followed by a phone call should be used to confirm employment status and income. Don’t rely on supplied telephone numbers. Always look up the firm’s contact details. Similarly with a previous landlord’s reference. 

Always meet and finally interview the applicant(s) in person (or at least by video link) as an imposter and background check. Have some detailed and searching questions ready to ask to see if the answers tally with the information already supplied. 

Retain all records of every check you carry out, including the right-to-rent checks, to preserve your statutory excuse.

Finally 

A thorough referencing system can minimise your risk of getting a bad tenant, but it can never eliminate it entirely. A referencing “pass” from a good referencing agency will reduce your risk to a minimum, but don’t forget your own or your trusted agent’s input in the process. Stay alert during the tenancy for signs of trouble or if there are any discrepancies arising from the original application.

Get this right at the outset. Don’t take any chances, as under the new legislation a possession claim will take longer and cost more than when there was a quiet, no-fault exit.