Tenancy fraud is draining £266 million from landlords every month, with 70 percent of victims unable to recover their losses, new research from LegalforLandlords reveals.
The legal firm’s survey estimates that around 275,000 landlords – roughly 5 percent of the total – have fallen victim to some form of tenancy fraud. The annual cost to the sector exceeds £3.2 billion, with more than £2.2 billion permanently lost.
Rent defaults top the fraud list
The most common form of fraud is straightforward rent default – tenants who move in with no intention of paying. This accounts for 70 percent of cases and leaves landlords trapped in lengthy court battles while fraudsters live rent-free for months.
Illegal subletting affects 20 percent of landlords who report fraud. In these cases, tenants rent out rooms or entire properties without permission, pocketing the income while the landlord remains liable for any problems. Some 8 percent of victims were deceived by fake financial documents, where prospective tenants created false employment records or bank statements to pass referencing checks.
Other scams include identity fraud – using fake IDs, credit reports or documents to rent under a false name – and money wire transfer fraud, where tenants overpay by cheque and request the difference back before the original payment bounces.
This follows Landlord Knowledge’s October report on unauthorised subletting, which found two-thirds of landlords had discovered tenants illegally subletting their properties. The latest figures suggest fraud extends well beyond subletting into more sophisticated deception.
Warning signs landlords should watch
LegalforLandlords highlights several red flags that should trigger additional scrutiny: limited or questionable online presence, suspicious references or referees who seem difficult to verify, and any attempts to avoid or rush through background checks.
The firm also warns landlords to be alert to Politically Exposed Persons (PEPs) – individuals in positions of public authority who may pose higher compliance risks.
Sim Sekhon, Group CEO at LegalforLandlords, said: “Tenancy fraud is a growing and increasingly complex issue across the private rental sector, and these figures highlight just how significant the financial impact has become for landlords.”
“While many scams are becoming more sophisticated, a large proportion can still be prevented through thorough checks and strong legal processes at the very start of a tenancy,” Sekhon said.
The research comes as court delays push eviction costs beyond £3,000 per case, making fraud even more costly. Once a fraudulent tenant is identified, landlords must go through the same lengthy possession process as any other eviction – giving dishonest tenants months of free accommodation.
What this means for landlords
- If you self-manage: Consider professional referencing services that verify employment, income and identity through multiple sources – the upfront cost is far less than average fraud losses
- Watch for: Prospective tenants reluctant to provide standard documentation or who pressure for quick move-in dates without proper checks
- Bottom line: Prevention is the only viable protection – once fraud occurs, court timescales and legal costs make full recovery unlikely
Editor’s view
These numbers are alarming but not surprising given the current state of possession enforcement. When it takes months to remove a non-paying tenant, the incentive for fraud grows – the rewards are high and the risks minimal. Until court timelines improve, thorough referencing remains the landlord’s only real defence.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 25 March 2026
Sources: LegalforLandlords
Related reading: Two-thirds of landlords uncover unauthorised tenant subletting
