Tenant fraud has raised the agenda of private landlords.
What was once a background issue is now a front-page issue, shaped by changing regulations, economic pressures and evolving fraud techniques.
For mortgage brokers advising homeowner clients, understanding this area – and knowing how to respond to it – becomes a very important part of the value we add.
The details tell a clear story. Housing fraud costs UK landlords an estimated £266m a month, many of whom are unable to recoup their losses. A study by Goodlord, comparing more than 300,000 recruitment applications, found that detected fraud increased from just 1 case per 1,000 applications in 2022 to 2.9 cases per 1,000 1,000 in 2023 – an increase of 140%, year on year.
Doctored bank statements are the most common strategy
About 94 percent of fraud cases involve fake documents, with doctored bank statements being the most common tactic. The Cifas Fraudscape 2026 report adds more weight to the picture. More than 444,000 cases were recorded in the National Fraud Database in 2025 – the highest number in one year. Within that, the filing related to the reference to the employer increased by 263 cases – a significant increase that shows the growing awareness among professionals to identify fraudulent attempts at the application stage.
References based on traditional documents – such as payslips or bank statements – are becoming less reliable, as AI tools can now generate highly convincing fake documents in a matter of minutes.
More exposed than ever
Fraud data will be about any location. Under the Employers’ Bill of Rights 2025, the numbers are much higher. With the abolition of Section 21, landlords will no longer be able to repossess property without a specific legal reason. Section 8 notice periods have been extended – in most cases to four months.
The court backlog means that the foreclosure proceedings can take longer than the notice period alone suggests. For a landlord who has unknowingly placed a fake tenant, the practical implications are dire: a lengthy foreclosure process, potential rent arrears and limited assistance.
Sellers who treat this as part of the homeowner advice conversation will be better off – and so will their customers
There is also an administrative method available under such circumstances – Ground 17 of the Housing Act, which applies when the residence was obtained with a false statement – but it is optional, requires clear evidence and is far from a guaranteed or quick solution.
About 20% of landlord respondents in a recent survey reported that they were victims of illegal abortions, and 8% reported that they were victims of false financial information provided by prospective tenants. Apart from the loss of money, a fraudulent lease can expose the landlord to serious problems – from premises being used for illegal purposes to serious damages.
Protection
The good news is that a strong reference, used consistently, greatly reduces exposure.
Good practice now involves several layers. Proof of identity should be the starting point – a passport or driver’s license test, not just copies. A professional recruiter’s reference from an established provider is essential; self-observation is increasingly insufficient. Employment and income must be independently verified.
What was once a background issue is now a front issue
The industry is moving towards direct data verification, including Open Banking, HMRC income verification and audit analysis of financial records – all of which are much harder to falsify than a PDF payslip. When a prospective employer rejects Open Banking, that rejection itself needs to be scrutinized. Previous landlord references should be taken directly, and ideally from the landlord before the current one.
Landlords must also keep detailed records of all checks. Insurers often expect evidence of due diligence.
Buyers may not direct professionals but are often trusted professionals in the landlord-client pipeline. That creates a real opportunity.
Buyers can play an important role in raising awareness of fraud at the right time – when a landlord is taking on a new property, refinancing or restructuring a portfolio. A discussion about borrower requirements and rental income verification naturally connects to a broader discussion about how that rental income is established and protected. Recommending reputable referral providers, signing the Open Banking certification change, and marking the level of due diligence insurance are all areas where a merchant can add tangible value.
A qualified tenant referral from an established provider is essential
Employer fraud is not a niche risk. It’s a growing problem, backed by data made more consequential by recent law changes. Buyers who take it as part of the landlord advice conversation will be better off – and so will their customers.
Jeni Browne bdirector of business development at Mortgage Finance Brokers
This article appeared in the July/August 2026 issue of Mortgage Strategy.
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