From 14 May 2025, new Financial Sanctions Regulations will come into force, introducing new compliance obligations for letting agents across the UK. These rules are part of a broader effort to combat financial crime and align the property sector with government sanctions policies.
What are Financial Sanctions?
Financial sanctions are legal restrictions placed by the UK government on certain individuals, companies or countries involved in activities that threaten national security or international stability. These may include:
- Freezing assets
- Blocking financial transactions
- Banning business dealings with specific people or organisations (known as “designated persons”)
Letting agents will now play a key role in helping to enforce these sanctions through mandatory checks and reporting.
What’s changing for letting agents?
Starting in May 2025, letting agents will be legally required to:
- Screen landlords and tenants against the UK government’s sanctions list
- Report suspicions to the Office of Financial Sanctions Implementation (OFSI) if they know or suspect a breach
- Keep clear records of all checks and any reports made
These rules apply to all rental properties, regardless of rent amount. This marks a major shift from the current Anti-Money Laundering (AML) rules, which only apply to properties with rents above £10,000 per month.
Why compliance is crucial
Ignoring these rules is not an option. Failure to comply can lead to:
- Hefty fines
- Reputational damage that could harm client trust
- Criminal penalties, including possible prosecution in serious cases
This regulation aims to protect the property sector from being used to support illegal or harmful financial activity.
Next steps for Letting Agents
To prepare for the new rules, letting agents should:
- Train all relevant staff on financial sanctions and reporting procedures
- Review and update internal processes for onboarding clients
- Use compliance software or property management systems to streamline checks
- Stay informed through guidance from industry bodies like Propertymark
Taking early action will help you avoid disruption, reduce risk and show clients and regulators that your business takes compliance seriously.
