Approximately 275,000 UK landlords have fallen victim to tenancy fraud, with 70% unable to recover their financial losses, according to research from LegalforLandlords.
The legal firm estimates that around 5% of all property owners have been affected by illegal tenant activity, resulting in monthly losses of £380 million across the sector. Of this figure, £266 million is never recovered.
Rent arrears dominate fraud cases
The survey identified rent default as the most prevalent form of tenancy fraud, accounting for 70% of reported cases. Other common fraudulent activities include illegal subletting, reported by 20% of affected landlords, and fake financial information, which accounted for 8% of cases. Additional scams include identity fraud and money wire transfer fraud.
The firm highlighted several warning signs that may indicate fraudulent tenants, including limited or questionable online presence, suspicious references or referees, and attempts to conceal information during background checks.
Extended repossession timelines
Previous research from the same firm found that the average timeline for property repossession now exceeds 26 weeks, potentially extending the financial impact on landlords dealing with fraudulent tenancies.
Sim Sekhon, Group CEO at LegalforLandlords, stated: “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.”
Sekhon added that 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 findings suggest that improved tenant screening procedures and enhanced verification processes may be necessary to reduce fraud rates in the private rental sector.