With monthly losses from tenancy fraud reaching an estimated £266m, around 70% of affected landlords are unable to recover the funds. 

Data suggests the problem is widespread, with one in 20 landlords reporting they have been targeted.

The latest from a landlord support company’s survey shows that the most common form of tenancy fraud is rent-defaulting — where tenants move in with no intention of paying and aim to live rent-free for as long as possible. 

Once the deception becomes clear, landlords face a lengthy process to remove the fraudster. A further 20% of landlords respondents report falling victim to illegal subletting.

Around 8% of landlords say they have been targeted with fake financial information, where prospective tenants submit fabricated employment or income documents to appear able to afford the rent. 

Other common scams include identity fraud — using false names, doctored credit reports or forged bank statements to secure a tenancy — and money-wire transfer schemes. 

In a typical example, the tenant sends a cheque for more than the required amount and asks for the excess to be returned, only for the original cheque to bounce.

Take note of common red flags for tenancy fraud include applicants with a limited or suspicious online presence, unusual or unverifiable references, and any attempts to obstruct or manipulate background checks. 

Landlords and agents should also remain alert to prospective tenants who are Politically Exposed Persons (PEPs) or individuals who may be subject to sanctions, either personally or due to their nationality.

A spokesman for the company, says: “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, fastidious checks and robust legal processes at the very start of a tenancy.

“The reality is that tenant fraud is now as much a technology challenge as it is a procedural one. 

“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.”