Revised AML & Financial Sanctions Regulations Commence

As the UK government continues its efforts to tackle financial crime, significant updates to Anti-Money Laundering (AML) and financial sanctions regulations are set to take effect from today (14th May, 2025). These new requirements will have a profound impact on letting agents and landlords, particularly with the broadening of sanctions checks for all tenants and landlords - regardless of rental value. Fuller Gilbert delves into the key changes, their implications, and what landlords and agents will be required to do

Key Changes to AML and Sanctions Regulations:

Under the updated rules, letting agents will be required to conduct enhanced sanctions checks on all tenants and landlords, including those involved in property transactions and rental agreements. The most notable update is that the €10,000 rent threshold (approximately £8,300) for triggering checks is removed. This means that ALL lettings — regardless of the rental value — are now subject to AML and sanctions checks.

Letting agents must now identify and report any suspected involvement of tenants or landlords with individuals or entities listed on the UK financial sanctions list. If a “designated person” (someone with assets or associations connected to criminal activities) is identified, agents must report this to the Office of Financial Sanctions Implementation (OFSI), and disclose any related funds or assets. This applies to both existing tenants and those seeking new tenancies.

In addition, sanctions can include measures such as asset freezes, restrictions on financial services, and limitations on property transactions. The scope of these measures has widened, meaning letting agents and landlords alike will need to be more vigilant in conducting thorough checks.

Who is Affected?

These new regulations will affect:

• All letting agents — including those who manage properties on behalf of landlords.
• All landlords, whether they manage properties directly or use letting agents. Self-managing landlords are particularly responsible for carrying out their own sanctions checks to ensure they are not renting to individuals or entities involved in criminal activities.
• Tenants and landlords, who will need to provide additional documentation for checks if required.

Failure to comply with these updated regulations could result in significant penalties, including unlimited fines or other enforcement actions. Letting agents, in particular, must report any breaches or suspicious activities to OFSI "as soon as practicable," meaning swift action is necessary to avoid potential legal consequences.

What Landlords and Letting Agents Need to Do:

Landlords and agents should take proactive steps to ensure compliance with these new rules:

• Ensure all records are up to date: Keeping personal and business records accurate and current will streamline the checks process.
• Review compliance procedures: Letting agents should review their compliance procedures and ensure they are in line with the new regulations. Landlords should discuss these requirements with their agents to understand their responsibilities.
• Perform regular sanctions checks: Even for self-managing landlords, it’s essential to carry out periodic sanctions checks to avoid potential complications with property freezing orders or restrictions.
• Consult legal or compliance experts: For further guidance on compliance, landlords and letting agents should consult with legal professionals or compliance experts to ensure they are fully informed about the legal requirements under these new rules.
• Stay informed about evolving regulations: These rules may evolve over time, so it is important to stay informed about updates and changes to financial sanctions.

 

What’s at Stake for the Property Market?

The new regulations aim to increase oversight and reduce the risks of financial crime, particularly in sectors such as property where high-value transactions can sometimes be used for illicit purposes like money laundering.

Experts believe the new rules will create a safer and more transparent environment for legitimate investors, though the administrative burden could be a challenge for smaller players in the property market. Some may argue that this could lead to higher compliance costs, but the overall impact on financial crime reduction will be positive.

As the rules come into force, the UK government will be keenly monitoring their implementation and will likely adjust policies as necessary to ensure that compliance is streamlined while still maintaining robust checks.

 

Why Choose Fuller Gilbert?

With a passion for property & a commitment to delivering exceptional service, Fuller Gilbert & Company estate agent provides a comprehensive property sales, lettings and management service, with emphasis on quality, transparency and customer satisfaction.Whether you’re buying, selling, renting or investing, Fuller Gilbert combines in-depth local knowledge with a tailored approach to ensure every transaction is smooth and successful.

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For more information about Fuller Gilbert & Company, or to discuss your property requirements, Please call 020 7581 0154, email: info@fullergilbert.co.uk or send a message via the contact form on our contact page.