Buy-to-Let Watch: Tackling tenant fraud – Mortgage Strategy
Tenant fraud has moved firmly up the agenda for private landlords.
What was once a background concern is now a frontline issue, shaped by legislative change, economic pressure and increasingly sophisticated forgery techniques.
For mortgage brokers advising landlord clients, 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. Tenancy fraud is costing UK landlords an estimated £266m a month, with most unable to recover their losses. Research by Goodlord, comparing over 300,000 tenancy 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 — a 140% rise, year on year.
Doctored bank statements are the most common tactic
Some 94% of fraud cases involve fake documents, with doctored bank statements the most common tactic. The Cifas Fraudscape 2026 report adds further weight to the picture. More than 444,000 cases were recorded to the National Fraud Database in 2025 — the highest number in a single year. Within that, filings relating to tenant referencing increased by 263 cases — a notable rise that reflects growing awareness among referencing professionals of fraud attempts at the application stage.
Traditional document-based referencing — such as payslips or bank statements — is becoming less reliable, as AI tools can now generate highly convincing fraudulent documents in a matter of minutes.
More exposed than ever
The data on fraud would be concerning in any environment. Under the Renters’ Rights Act 2025, the stakes are considerably higher. With Section 21 abolished, landlords can no longer recover possession without a specific legal ground. Section 8 notice periods have been extended — in many scenarios to four months.
Court backlogs mean 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 severe: a protracted possession process, potential rent arrears and limited recourse.
Brokers who treat this as part of the landlord advice conversation 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 tenancy was obtained by false statement — but it is discretionary, requires clear evidence and is far from a guaranteed or swift remedy.
Around 20% of landlord respondents in recent research reported being victims of illegal subletting, and 8% reported having fallen victim to fake financial information provided by prospective tenants. Beyond financial loss, a fraudulent tenancy can expose a landlord to serious complications — from properties being used for illegal purposes to substantial damage.
Protections
The good news is that robust referencing, consistently applied, significantly reduces exposure.
Best practice now involves several layers. Identity verification should be the starting point — passport or driving licence checks, not just photocopies. Professional tenant referencing from an established provider is essential; self-referencing is increasingly inadequate. Employment and income should be independently verified.
What was once a background concern is now a frontline issue
The industry is shifting towards direct data verification, including Open Banking, HMRC income validation and forensic analysis of financial records — all of which are considerably harder to falsify than a PDF payslip. Where a prospective tenant declines Open Banking, that refusal itself warrants scrutiny. Previous landlord references should be taken up directly, and ideally from a landlord prior to the current one.
Landlords should also keep detailed records of every check. Insurers increasingly expect evidence of reasonable due diligence.
Brokers may not be referencing specialists but they are often a trusted professional in a landlord client’s orbit. That creates a genuine opportunity.
Brokers can play a valuable role in raising awareness of the fraud landscape at the right moment — when a landlord is taking on a new property, refinancing or restructuring a portfolio. A conversation about lender requirements and rental income verification naturally connects to a wider discussion about how that rental income is established and protected. Recommending reputable referencing providers, signposting the shift to Open Banking verification, and flagging the insurance dimension of inadequate due diligence are all areas where a broker can add tangible value.
Professional tenant referencing from an established provider is essential
Tenant fraud is not a niche risk. It is a growing, data-supported problem that has been made materially more consequential by recent legislative change. Brokers who treat it as part of the landlord advice conversation will be better positioned — and so will their clients.
Jeni Browne is business development director at Mortgage Finance Brokers
This article featured in the July/August 2026 edition of Mortgage Strategy.
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