With supervision under the UK’s anti-money laundering (AML) regime undergoing a landmark transformation – read our article here, ‘What The AML Supervision Reforms Mean For Regulated Businesses’ – the property sector is set to face unprecedented regulatory scrutiny. As we previously highlighted, between October 2024 and March 2025, HMRC fined 194 estate and letting agents over £1 million for AML breaches. Read it here: ‘Estate Agents Bear Brunt of AML Charges’.
Add that to the previous twelve months, and the total exceeds £2.9 million in penalties. Individual fines have ranged from £1,250 to over £50,000, with the vast majority stemming from a single issue: failing to register for AML supervision on time.
But registration failures are not the only issue facing the property industry. HMRC inspections have uncovered inadequate risk assessments, poor customer due diligence, missing policies and a widespread lack of staff training. For letting agents, the situation became even more complex on 14 May 2025 when new financial sanctions reporting obligations came into force, applying to all letting agents regardless of rental values.
At the Regulation and Compliance Office (RACO), we work with estate agents, letting agencies and property professionals across multiple sectors to ensure they meet their regulatory obligations. Whether you need support with AML compliance, customer due diligence or preparing for HMRC inspections, we can help.
Why the Property Sector Is High Risk
The National Risk Assessment 2025 (NRA 2025) reports that property transactions are seen in all typologies and predicate offences for money laundering, including corruption, sanctions evasion, modern slavery and human trafficking, organised immigration crime, drugs and fraud. The money laundering risks posed by the property sector overall have been assessed by the NRA 2025 as having a higher risk of money laundering, with estate agents identified as one of the property sectors with the highest risk of exposure.
Steps for Regulatory Compliance
If you haven’t already, take these steps immediately:
Step 1: Confirm your registration status. Check that your business is registered with HMRC if required, and that your registration is current. If you have missed the renewal, register now. Late registration attracts a penalty, but it’s far less than the fine for continuing to trade unregistered.
Step 2: Conduct an independent audit. It is a regulatory requirement for most businesses operating in the regulated sector to carry out an ‘Independent Audit of AML Policies, Controls and Procedures’ and is essential to comply with Regulation 21 of the Anti-Money Laundering Regulations. Failure to undertake this audit results in failure to comply with the Regulations, and it remains your responsibility to your regulator to ensure this is done effectively. The problem for many businesses is how to satisfy the ‘independence’ requirement of Regulation 21 (1) (c) of the MLR 2017. Our Full Regulation 21 Audit Service provides businesses and their owners with a truly independent audit and report which meets regulatory requirements and is specifically designed to comply with the requirement of the MLR 2017.
Step 3: Understand your obligations under the new sanctions rules. If you’re a letting agent, you need to know what the May 2025 changes mean for your business, even if you’re not required to register for full AML supervision.
Step 4: Train your staff. Providing training is a legal requirement for all regulated businesses. All staff are required to understand the actions that need to be taken and how they comply with the legislation, both personally and on behalf of the firm. RACO provides a range of training courses designed to equip compliance officers with the necessary skills and understanding – AML Training for Regulated Businesses.
Step 5: Document everything. Keep detailed records of all compliance activities. If HMRC inspects you, you’ll need to evidence what you’ve done.
How RACO Can Help
At RACO, we provide practical compliance support to estate agents, letting agencies and other property professionals across the UK to establish efficient AML strategies.
We offer specialist support to help firms meet their obligations, tailored to suit the needs of the business without overburdening internal teams. Our services include:
Compliance Services: Tailored solutions for AML, onboarding and regulatory support, ensuring your business remains audit-ready. Find out more about our compliance services.
Due Diligence and Risk Assessment: Our expert compliance teams complete the entire due diligence process on your behalf, including client risk profiling, source of funds verification, and documentation. Learn more about our due diligence support.
All agents must register with HMRC for AML purposes. If you have not made your application, we will work with you to submit and obtain approval.
When you have approval, we will help you retain your approval status and provide the necessary compliance support to protect your agency.
For more information about how we work with Estate Agents, please review our Services Page.
Contact Us
If you would like to discuss our services in more detail, contact us at 0203 985 8550 or email us at info@regulationandcomplianceoffice.co.uk
