Tenancy Fraud UK 2026 — Landlord Guide to Detecting & Preventing Rental Fraud

Identity fraud — the most common referencing fraud

Identity fraud involves a tenant using a false or stolen identity to pass referencing and secure a tenancy:

• How identity fraud works: A fraudster uses a false or stolen identity — typically with fabricated or stolen identity documents (driving licence, passport, utility bills, bank statements) — to apply for a tenancy. The fraudster passes referencing checks because the credit history, employment records, and address history attached to the stolen identity are legitimate. Once in the property, the fraudster either disappears without paying rent, sublets the property, or uses it for criminal purposes
• Detecting identity fraud: Landlords and referencing agencies should: verify identity documents against the issuing authority's standards (e.g., DVLA check for driving licences, HM Passport Office standards for passports); use facial recognition or live video verification to confirm the person presenting documents matches the identity; verify that utility bills and bank statements presented have not been digitally manipulated; cross-reference the applicant's current address against Royal Mail records; and use a credit reference check that includes identity verification (such as Equifax, Experian, or TransUnion identity verification products)
• IDSP digital identity verification: From April 2022, landlords in England can use Identity Service Provider (IDSP) certified services to conduct right-to-rent checks for British and Irish citizens. IDSPs use Document Checking Service (DCS) integration with the Home Office to verify passports against the central database. Using a certified IDSP provides a statutory excuse if a fraudulent document is presented that the IDSP failed to detect — the landlord has a defence against a right-to-rent civil penalty
• Right-to-rent document fraud: Fraudsters seeking to bypass right-to-rent checks may present forged or counterfeit biometric residence permits (BRP), fake visas, expired passports, or documents belonging to someone else. The Home Office provides guidance on document verification — landlords should be familiar with the security features of common documents (holograms, microprint, UV features) or use the Share Code online checking service for non-UK nationals
• Consequences of identity fraud for landlords: Where identity fraud occurs, the landlord faces: rent arrears (the fraudster typically stops paying rent); potential property damage; the need for possession proceedings (which may require identifying the actual occupant); and potential right-to-rent liability if checks were not properly conducted. Some landlords' insurance policies exclude fraud-related losses — check the policy terms

Document fraud — fabricated payslips, references, and bank statements

Tenants who cannot pass income or employment referencing sometimes present fraudulent documents:

• Fabricated payslips: Payslip fraud is common — particularly with the widespread use of editable PDF payslip templates. A fraudster can produce a convincing payslip showing a higher salary, a different employer, or a different job title in minutes. Detection methods include: calling the employer directly (using a phone number from an independent source, not the number on the payslip) to verify employment; requesting multiple months' payslips and checking for consistency; looking for formatting inconsistencies (wrong font, misaligned fields, incorrect PAYE reference format); and using payslip verification services
• Fabricated bank statements: Bank statement fraud involves digitally altering PDF bank statements to show higher balances or remove adverse transactions (missed payments, gambling transactions, payday loans). Detection methods include: requesting original printed statements from the bank (not PDF downloads); using Open Banking connections (where the applicant connects their bank account digitally — the data goes directly from the bank to the reference checker, bypassing the applicant); looking for unusual formatting or inconsistent transaction references; and checking that the account holder's name matches the applicant exactly
• Fraudulent employer references: Some fraudsters provide references from fictitious employers or from friends posing as employers. Detection: call the employer independently (directory enquiries or Companies House, not the number provided by the applicant); verify the company's Companies House registration and trading status; check LinkedIn or the employer's website to confirm the job title and department exist; and for limited companies, check whether the reference signatory appears to be an employee
• Fraudulent previous landlord references: Where a previous landlord reference comes from a friend posing as the landlord, detection is harder — but: cross-reference the 'previous landlord' against the electoral roll or Land Registry to verify they actually own the property; call back on a number found independently; and ask specific questions about the tenancy that only a genuine landlord would know (tenancy start date, rent amount, deposit scheme used)
• Using specialist referencing agencies: Specialist tenant referencing agencies (Homelet, Canopy, Let Alliance, Rightmove Referencing) have fraud detection tools built into their processes — including document verification, open banking integration, and employer verification databases. The cost (typically £15-£30 per applicant) is significantly less than the cost of dealing with a fraudulent tenant after the fact

Subletting fraud and unauthorised use

Subletting fraud occurs when a tenant lets the property to a third party without the landlord's consent, often at a profit:

• How subletting fraud works: A tenant in a property where subletting is prohibited (as it is in most ASTs) secretly sublets all or part of the property to other occupiers, collecting rent from them while paying the landlord's rent from those proceeds (or stopping payment altogether). The subtenant may be entirely unaware of the fraudulent arrangement. When the landlord discovers the subletting, the position can be legally complex — particularly where the subtenants have children or other dependants
• Short-term let fraud (Airbnb): A variant is where the tenant secretly lists the property on Airbnb or similar platforms for short-term lets, earning significantly more than the contractual rent. The property is effectively used as a commercial operation, causing wear and tear and potentially violating planning conditions (the 90-day Airbnb rule in London, for example). Detection: periodic property inspections; monitoring short-term let platforms for the property address; and ensuring the tenancy agreement explicitly prohibits subletting and short-term letting
• Consequences of unauthorised subletting: The landlord's position on discovering unauthorised subletting: the subtenant has no tenancy with the landlord (the head tenancy has no subletting clause, so the subletting is invalid as against the landlord); the landlord can seek possession of the property; but must still deal with the subtenants as occupiers who may resist eviction. Where the subtenants are vulnerable, the courts may delay possession. The original tenant faces breach of tenancy (a Section 8 ground) — under Ground 12 (breach of tenancy terms)
• Cannabis cultivation: Properties used for cannabis cultivation are a serious form of tenancy fraud — the tenant obtains the property under a normal tenancy and then converts it to a cannabis grow (removing internal walls, installing hydroponics, rerouting electricity, cutting holes in the roof for ventilation). The damage to a property used as a cannabis farm can be catastrophic: electrical rewiring, structural repairs, mould remediation, and decontamination. Detection: sudden drop in rental income followed by silence; utility companies reporting unusual consumption; unusual smells reported by neighbours; condensation and ventilation holes
• Insurance implications of cannabis cultivation: Standard landlord insurance policies typically exclude damage caused by illegal use. Specialist landlord insurance policies may include cannabis farm cover — check your policy. If the property is used as a cannabis farm, notify the police and your insurer immediately. Do not enter the property without a police escort until it has been declared safe (cannabis farms often have dangerous electrical installations)

Guarantor fraud — false or unverifiable guarantors

Guarantors provide a financial backstop for landlords — but guarantor fraud undermines this protection:

• How guarantor fraud works: A tenant who knows they will not pass referencing alone provides a guarantor — but the guarantor is either fictitious, is a friend or family member who does not have the financial means to guarantee the tenancy, or is a person who has not genuinely agreed to be a guarantor (their identity is used without consent). When rent arrears arise and the landlord seeks to enforce against the guarantor, the guarantor either cannot be traced, denies giving the guarantee, or lacks the financial resources to pay
• Verifying the guarantor: Guarantors should be subjected to the same referencing checks as the tenant — including credit checks, identity verification, and income verification. A guarantor must be creditworthy: their income should typically be at least 30-36x the annual rent (to cover both their own living costs and the guaranteed rent in a worst case). An independent guarantor (not a family member of the tenant) is generally more reliable
• Legal requirements for a guarantor agreement: A guarantor agreement must be executed as a deed (signed, witnessed, and delivered) to be enforceable — a simple signature on a letter is not sufficient. The guarantor agreement must specify: what obligations are guaranteed (rent, damage, or all tenancy obligations); whether the guarantee extends to renewals and periodic continuations; and the procedure for making a claim. Landlords should use a properly drafted guarantor deed — not a home-made letter
• Overseas guarantors: Overseas guarantors are difficult to enforce against — the landlord would need to pursue them through foreign courts or under international enforcement treaties. Where the only available guarantor is overseas, consider whether the financial exposure justifies proceeding without a UK guarantor, or whether a larger deposit or advance rent payment provides better protection
• Guarantor insurance products: Alternative to a personal guarantor: specialist guarantor insurance products (Zero Deposit, Reposit, flatfair) provide insurance-backed guarantees that replace the cash deposit. These are checked and underwritten by the insurer, removing the risk of fraudulent guarantors. Some products pay out on rent arrears as well as damage — providing more comprehensive protection than a personal guarantor

Prevention — building fraud detection into the lettings process

A structured fraud prevention approach significantly reduces risk:

• Use a certified referencing agency: Specialist referencing agencies with IDSP certification, open banking, and employer verification databases catch most common fraud types before the tenancy starts. The cost is modest relative to the risk of a fraudulent tenancy. Choose an agency that carries out live employer verification (not just accepting applicant-provided references) and offers open banking income verification
• Conduct right-to-rent checks correctly: For all adult applicants (not just the named tenant), carry out a right-to-rent check before the tenancy starts. Use the Share Code service for non-UK nationals (available online). Use a certified IDSP for UK and Irish nationals (provides a statutory excuse for failed document verification). Keep a clear record of all checks conducted and the documents examined
• Meet the tenant in person: Fraudsters using stolen identities often resist face-to-face contact. Insisting on an in-person viewing (or live video call with identity verification) makes identity fraud significantly harder. Use the viewing to compare the applicant's appearance with their identity document photograph
• Quarterly inspections: Property inspections (with 24 hours' written notice) allow the landlord to identify unauthorised subletting, illegal use, or unusual alterations before they become catastrophic. An inspection that reveals extra occupants, unexpected equipment, or unusual smells requires immediate investigation
• Tenancy agreement fraud clauses: Ensure the tenancy agreement explicitly prohibits: subletting or underletting without consent; use of the property for any illegal purpose; and running a business from the property. These clauses create a Section 8 basis for possession where fraud is discovered — without them, obtaining possession may be harder

Frequently asked questions