New Anti-Money Laundering Rules for Letting Agents in 2025

Starting on May 14, 2025, UK letting agents will be required to perform anti-money laundering (AML) checks on tenants, landlords, and guarantors, regardless of the rent amount. This new regulation aims to increase transparency in the property market and prevent illicit financial activities. The checks will include verifying the identities of all parties involved, assessing potential risks, and screening them against UK and international sanctions lists. Any suspicious matches or findings must be reported to the Office of Financial Sanctions Implementation (OFSI), with significant penalties for non-compliance.

The change places letting agents under the same regulatory framework as estate agents, law firms, and financial institutions, making them “relevant persons” under the UK Money Laundering Regulations 2017. This move addresses gaps in the previous system that allowed certain letting activities, particularly those involving corporate tenants or international clients, to evade scrutiny. The aim is to tighten up anti-money laundering measures in the property sector and ensure greater accountability.

To meet the new requirements, letting agents must register with HM Revenue & Customs (HMRC), conduct regular risk assessments, and retain records for at least five years. These measures are part of a wider initiative to prevent the UK property market from being exploited for money laundering or other illicit financial activities. While the implementation will require additional administrative work, the changes are seen as a critical step in safeguarding the sector from abuse.