Fraudsters are using AI to construct convincing tenant identities, employment histories and supporting documents capable of passing basic referencing checks, according to new research from tenant referencing platform Goodlord.
Suspected tenancy fraud rose by almost 40% during 2025. Between July 2025 and June 2026, 41 in every 1,000 applications were flagged for suspected fraud. Fake employment references rose faster still, up 226.6% year on year. Goodlord's report, Tenancy Fraud is No Joke, also recorded a 49% rise in confirmed fraud cases and estimates the private rented sector's annual exposure at as much as £4.1 billion.
Property expert Jonathan Rolande says the scale of the problem requires landlords to think differently about how they assess prospective tenants.
"AI is changing the nature of rental fraud. It is no longer just about someone knocking up a convincing payslip. People can build an entire identity that looks consistent from top to bottom, from their employment history to their references and supporting documents," he said.
"That is why landlords need to stop focusing on whether a single document looks genuine and start asking whether the person and the story behind the application can be verified independently."
Rolande sets out five checks landlords can carry out to reduce their exposure.
Confirm the person, not just the paperwork
"Right to Rent checks already require landlords to confirm that the person presenting an identity document is its rightful holder. That step is becoming more important as forged or AI-generated documents become harder to spot," he said.
"From October, the Government's updated Right to Rent framework will allow approved digital verification providers to use facial recognition and other digital identity tools. It is a sign that identity checks are moving beyond simply inspecting a passport or driving licence."
Verify employment and income independently
Fake employment references are among the fastest-growing fraud types in Goodlord's data. "A smart logo or a professional email signature is not proof that the underlying information is real," Rolande notes.
"Landlords and agents should use reputable referencing processes that verify employment and income independently and, where possible, at source. AI can make a fictional employer look credible, but independent checks can reveal whether the job, the company or the referee actually exists."
Look at whether the application makes sense as a whole
Rather than assessing each document individually, Rolande says landlords should consider whether an application holds together as a coherent picture. "Fraud often reveals itself in the gaps. Do employment dates, income, address history and referee details line up. Does the applicant's financial position make sense for the rent being offered. Can key details be corroborated by someone other than the applicant. One inconsistency might be nothing. Several appearing together should prompt further questions before the tenancy proceeds."
Pay attention to how the rent is being paid
An applicant's identity is only part of what landlords need to assess. "Landlords should also understand where rental payments originate, especially when a third party is involved or the payment arrangements seem unusual," Rolande explains. HMRC's anti-money laundering guidance for letting agency businesses identifies unclear sources of funds and payments from apparently unconnected third parties as potential risk indicators.
"There are legitimate reasons why a parent, employer or another person might contribute towards a tenant's rent. The key is that the explanation is coherent and can be verified. With AI making it easier to construct convincing false identities, landlords should consider the financial arrangements alongside the documents and the story they have been given."
Review checks regularly
Fraud tactics evolve, and referencing processes need to keep pace. "Landlords using a letting agent or referencing provider should understand what checks are being carried out and how those systems are updated in response to new fraud patterns.
"A process that worked well a few years ago may not be enough now that fraudsters have access to more advanced technology," Rolande adds. "The solution is to build several layers of verification so that a convincing document or an AI-generated identity cannot secure a tenancy on its own."
