AML legislation also affects certain letting agency businesses.

The rationale is that high-value rental properties can potentially be used to facilitate money laundering by enabling criminals to enjoy the benefits of illicit wealth while avoiding outright property purchases.

The overall direction of the reforms to AML set out in The Money Laundering and Terrorist Financing (Amendment) Regulations 2026  is not to expand the scope of AML regulation dramatically within the lettings sector, but rather to improve clarity and proportionality while maintaining scrutiny of higher-risk transactions and customer relationships.

Letting agents within the scope of the regulations are generally required to verify landlords and tenants, assess risks and maintain appropriate records.

Although the requirements are typically less extensive than those applying to property sales, they nevertheless represent a significant compliance obligation for affected businesses.

These obligations are particularly relevant to residential letting agents involved in higher-value residential tenancies, although similar considerations may arise in commercial lettings. Residential letting agents should be alert to unusual payment arrangements, unexplained third-party involvement and circumstances suggesting that the true identity of a tenant or landlord is being concealed.

Practical measures may include:

• verifying landlord identities. 
• verifying tenant identities. 
• understanding ownership arrangements. 
• monitoring unusual payment methods. 
• assessing potentially suspicious circumstances. 

Examples of concerns might include large rental payments from unexplained sources, the use of intermediaries without clear justification or reluctance to provide ownership information.

Commercial lettings can present particular challenges because corporate tenants, overseas entities and complex funding arrangements are more common. Residential lettings may also present AML risks where high-value properties are rented using funds from unclear sources, where rent is paid by unrelated third parties, or where ownership or occupancy arrangements appear unnecessarily complex.