I've been living in the UK for almost 2 years and only just got my license. I had no problem renting cars with my US license after the first year, they never asked for a passport or anything. The official website we checked when we moved here said in one place that it was a year from your first move and in another it was a year from your last visit to the US, so that was going to be our defense if anything ever came up, but it didn't. Not saying I recommend doing this, but just putting it out there.
That excuse has been tried and tested and always fails in court. ''Driving otherwise than in accordance with a licence' is a court appearance and when convicted, added to that persons criminal record in the UK.
This ''Driving otherwise than in accordance with a licence' appears time after time on immigration forums as a court conviction is a fail of the Good Character requirement. As I recall, a fail of 3 (?) years from the court case date, not the offence.
For those on a work visa that now have a time limit for how many years they can stay on this visa, a court offence can mean the difference between being allowed to stay in the UK and having to leave. i.e. They would fail ILR but can't renew their Tier 2 visa as they have used all those years up.
Being in an accident even if you didn't cause it, getting caught by a speed camera, being pulled over by the police on a routine check, would have revealed that you didn't have a licence that allowed you to drive in the UK. I doubt the insurers would pay out in the event of an accident and you and the car owner (the hire company) would be resposible for paying.