Guidance Note: AML for Residential Estate and Lettings Agency

This Guidance Note: Anti-Money Laundering (AML) for Residential Estate and Lettings Agency is intended to assist firms in understanding and complying with the relevant AML laws and regulations.  As an Estate Agency, it is important to understand your legal responsibilities under anti-money laundering (AML) regulations. This includes identifying risks, carrying out checks, and reporting suspicious activity. 

Money Laundering and Terrorist Financing

Money refers to the process of concealing the origins of money obtained through criminal activity, making it appear legitimate. In the property sector this can include:

• Purchasing property with criminal funds, then letting or selling it to create the appearance of legitimate income;
• Using complex company structures and multiple bank accounts to conceal the true beneficial owner of the property; 
• Engaging in mortgage fraud;
• Avoiding tax by undervaluing the sale price or manipulating the price of furniture and fittings to stay below taxable thresholds. 

Terrorist financing occurs when a person or entity raises, uses, or possesses money or other property with the intention of supporting terrorist activity.

The Regulations

Estate Agencies must comply with The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 as amended by The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 (collectively, ‘the Regulations’). 

Under the Regulations, an “Estate Agent” is defined as a firm or sole practitioner who, or whose employees, carry out estate agency work as defined in section 1 of the Estate Agents Act 1979.  A “Letting Agent” is defined as a firm or sole practitioner who, or whose employees, carry out letting agency work. 

The Regulations require Estate Agencies to take appropriate measures to prevent their services from being used for money laundering and terrorist financing. These obligations include:

• Implementing appropriate anti-money laundering (AML) policies and procedures;
• Conducting risk assessments;
• Carrying out customer due diligence; 
• Maintaining comprehensive records; and 
• Reporting any suspicious activity

Estate Agents are already required to carry out appropriate anti-money laundering (AML) checks, including screening against financial sanctions lists. From 14 May 2025, Letting Agents will also be required to conduct financial sanctions checks on both landlords and tenants. Further information for Letting Agents can be found here: Anti-Money Laundering (High Value Lettings)

Failure to comply with AML Regulations can result in significant financial penalties and imprisonment for up to seven years. 

Guidance

This Guidance Note provides only a brief overview of the applicable anti-money laundering (AML) regulations and it not intended to constitute legal advice. It does not replace your responsibility to ensure you are adequately trained in AML compliance or to consult and adhere to the official guidance issued by HM Revenue and Customs (HMRC) and HM Treasury.

HMRC guidance on the Regulations can be accessed here.  

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