New Anti-Money Laundering Rules Now Apply to All Lettings

From 14th May 2025, the UK government has introduced significant changes to anti-money laundering (AML) and sanctions regulations that now affect all letting agents, regardless of the rent value or whether the agent is registered for AML supervision.

Previously, sanctions checks were only required where the monthly rent exceeded €10,000. However, this threshold has now been removed. Letting agents are now legally required to carry out sanctions checks on every new landlord and tenant, no matter the rent level or agency size.

Sanctions are restrictions the government imposes to help prevent financial crime and protect national security. They can apply to individuals, companies, or entire countries.

As part of our compliance obligations, we are now required to check whether landlords or tenants appear on the UK sanctions list. If a match is found, it must be reported to the Office of Financial Sanctions Implementation (OFSI) immediately, and the instruction or tenancy cannot go ahead.

When you instruct us to let your property, we will carry out sanctions checks on you as part of the onboarding process. This is included within our standard Know Your Customer checks, alongside verifying ID and proof of ownership. We will be carrying out these checks for all new tenancies (i.e. when your property comes up for re-let before a tenancy agreement is signed). This will be a one-time process- once you have been through the checks once, you won’t have to do them again (unless for any reason the requirements of the legislation change).

You can also be fully reassured that we will carry out the required sanctions screening on all prospective tenants before a tenancy agreement is signed. These checks are now a mandatory part of the referencing process. We do not anticipate that this will cause any significant delays when securing tenants, it is a necessary step to ensure compliance with the law and protect your investment.

This change has been made to close a regulatory gap. Criminals often attempt to use the property market to move or conceal money. By removing the rent threshold, the government ensures that all agents, not just those handling high-value lets, are required to screen for sanctioned individuals.

This helps protect both businesses and landlords from unknowingly entering into illegal agreements.

What Happens If There’s a Match?

Although rare, if a sanctions check flags a potential match, we are legally required to:

• • Report it to OFSI
    
  • Pause any action on the tenancy or instruction
    
  • Await formal clearance before proceeding

There are serious penalties for non-compliance, including large fines and criminal sanctions, so it’s crucial we follow the proper process.

We are fully set up to manage this change for you. Our systems are compliant, our team is trained, and all checks will be carried out quickly and efficiently as part of our normal process. You won’t need to take any action unless we request specific documents.

If you have any questions or concerns about how the new regulations affect you, please don’t hesitate to get in touch!