Estate agents are at considerable risk of being the victims of financial crimes and are still a major target for criminals looking to move and disguise illicit funds. Property transactions, especially those involving large sums of money, complex ownership arrangements, and overseas buyers, are exactly why the sector stays high on the regulator’s radar.

In 2026, estate and letting agency businesses should expect anti-money laundering (AML) enforcement to remain active and likely to intensify. HM Revenue and Customs (HMRC), the designated supervisory body for AML regulations in the estate agency sector, will continue to review firmwide risk assessments, but also focus on something even more important: whether AML controls are actually being used day-to-day, not just seen as a tick-box exercise.

In this article, our compliance team will cover key AML obligations for estate agencies, what HMRC typically looks for, and the practical steps you can take to stay compliant.

Why AML matters for estate agents

Unlike some regulated sectors, estate agents can be at the very beginning of the money-laundering chain. A property purchase is an easy way to:

• introduce criminal money into the financial system
• hide the true owner behind third parties or company structures
• create a “legitimate” paper trail for funds that aren’t legitimate at all

That’s why property remains a high-risk route, and why estate agents must comply with the UK’s AML rules.

Failing to meet these obligations can result in:

• regulatory investigation
• financial penalties and criminal prosecution (for individuals, too, not just the business)
• disruption to business operations
• long-term reputational damage and regulatory sanctions

Who regulates AML compliance for estate agents?

Estate agents fall under the Money Laundering Regulations 2017 (MLR 2017).

For most UK estate agency businesses, the main AML supervisor is HM Revenue & Customs (HMRC). HMRC conducts inspections, compliance checks, and enforcement actions when firms fall short.

This differs from sectors such as banking, where AML supervision is typically overseen by the Financial Conduct Authority (FCA).

However, as highlighted in our previous blog, ‘Preparing Regulated Businesses for FCA AML Supervision,’ the UK government has confirmed the FCA will assume sole AML supervisory responsibility for professional services by 2026. This means that the Financial Conduct Authority (FCA) will become the single professional services supervisor for anti-money laundering and counter-terrorism financing (AML-CTF). The supervision change will affect a wide range of professional services and regulated businesses, including:

• Estate agents and letting agencies
• Accountants and tax advisors
• Trust and company service providers (TCSPs)
• High-value dealers and Art Market Participants
• Solicitors and Independent Legal Professionals

What are the core AML requirements for estate agents?

The core AML requirements for estate agents

AML compliance is built around a risk-based approach. In simple terms, firms must:

• understand the risks
• apply controls that match those risks
• document what they do
• be able to evidence decisions clearly

Below are the key requirements HMRC expects to see in place.

1) Firm-Wide Risk Assessment (FWRA)

Every estate agency business must have a Firm-Wide Risk Assessment that reflects how the business actually operates.

It should cover:

• customer types (individuals, companies, overseas buyers)
• geographic exposure (including high-risk countries)
• transaction types (high-value deals, urgency, complex structures)
• delivery channels (remote onboarding, third parties)

A generic or outdated FWRA is one of the most common reasons firms fail HMRC inspections.

2) Customer Due Diligence (CDD)

Customer Due Diligence isn’t optional.

Before establishing a business relationship, estate agents must:

• identify the customer
• verify identity using reliable sources
• understand the purpose of the transaction
• assess and record the level of risk

Where the buyer is a company, firms must also identify and verify the beneficial owner(s).

3) Enhanced Due Diligence (EDD)

EDD is required for higher-risk matters. Common triggers include:

• politically exposed persons (PEPs)
• complex ownership structures
• unusual behaviour during the transaction
• clients from higher-risk jurisdictions
• unclear or unexplained funding routes

EDD shouldn’t just mean “ask for more documents”. It needs to show deeper checks, stronger scrutiny, and clear reasoning for why the transaction is proceeding (or why it isn’t).

4) Source of Funds and Source of Wealth checks

This is one of the biggest AML pressure points in property, and a key focus in 2026.

Estate agents should be able to evidence:

• Source of Funds: where the purchase money is coming from
• Source of Wealth: how the customer accumulated that money overall

This becomes especially important where you see large deposits, overseas transfers, or third-party involvement.

5) Ongoing monitoring and record keeping

AML isn’t a one-time exercise.

Estate agents should:

• monitor for changes in risk
• refresh due diligence if circumstances change
• keep clear records of checks, decisions and approvals

Under the regulations, records must be retained for the required period and made available if HMRC requests them.

6) Suspicious Activity Reports (SARs)

If you know or suspect money laundering, you must submit a Suspicious Activity Report (SAR) to the National Crime Agency (NCA).

A SAR isn’t about certainty. It’s about suspicion.

That’s why firms need a clear internal escalation process, and staff who actually understand when and how to raise concerns.

Common AML weaknesses seen in estate agency firms

Across inspections and enforcement cases, the same issues appear repeatedly:

• FWRA is generic, outdated or copied from templates
• CDD completed inconsistently or missing key information
• EDD triggers not recognised or ignored
• no clear source of funds evidence
• poor staff training records
• weak internal reporting routes for suspicions
• inadequate audit trail (no clear “why” behind decisions)

The risk is not only fines. These weaknesses can expose the business to being used as a conduit for criminal funds.

AML best practice for estate agents in 2026

If you want to reduce risk and stay inspection-ready, these are the areas that matter most.

Keep your AML documentation up to date

Policies and risk assessments should reflect:

• the services you actually offer
• the clients you genuinely deal with
• real-world examples of risk (not just theory)

Train staff properly — and record it

Staff should understand:

• key red flags in property transactions
• when to escalate concerns
• what information must be collected and why

Training should always be documented.

Build consistency into due diligence

You don’t need perfection — you need consistency.

Firms should be able to show:

• a clear onboarding process
• defined EDD triggers
• proper approvals and sign-off for higher-risk cases

Make escalation simple and usable

Suspicion should have a clear pathway:

staff → nominated officer/MLRO → SAR decision

And it needs to work in practice, not just on paper.

How the Regulation and Compliance Office can support estate agents

AML compliance isn’t just about avoiding enforcement. It’s about protecting your business, your team, and your reputation.

If you need help strengthening AML controls, updating documentation, or preparing for HMRC supervision, we can support you with practical, proportionate advice.

We can support your estate agent business with:

• Review AML policies and procedures to ensure they align with your regulator’s expectations, especially around risk assessments and customer due diligence.
• Train your team to ensure staff understand their obligations, including suspicious activity and reporting.
• Provide outsourced compliance services, including:
  • Outsourced Due Diligence & Risk Assessment: We carry out the due diligence work and prepare risk assessments, so your internal team can focus on review and oversight.
  • Anti Money Laundering (AML) Compliance Service: This support service has been designed to provide AML regulated businesses with an effective solution for the management and control of compliance with the Anti Money Laundering Regulations. Our service is an annual subscription that provides Businesses with ongoing support from our compliance team and ensures your Business has in place appropriate and compliant Policies, Controls and Procedures (PCP’s) that are maintained by us.
  • Risk, Anti Money Laundering Guidance and Register Administration Service has been designed to provide Businesses and their Money Laundering Reporting Officer (MLRO) with a support function that ensures their regulatory and compliance obligations are fulfilled on an ongoing basis, and staff are provided access to ongoing advice as needed.
  • Regulation 21 Independent Audit. Our service provides businesses with a completely independent audit and ensures the review is completed and reported on in accordance with the regulatory requirements.
  • AML Training. Training staff on the Anti Money Laundering Regulations is a legal requirement. Your staff should understand (and be able to evidence understanding) how the AML rules and the processes the business has implemented to minimise the risk of money laundering.

If your business needs help strengthening AML controls, updating documentation, or preparing for HMRC supervision, we can support you with practical, proportionate advice.

Our compliance specialists provide practical, sector-specific guidance that enables property agents to meet their obligations without hindering business operations. We work with agencies of all sizes, tailoring our approach to each business’s working methods and risk profile.

Talk to our Compliance experts 

At the Regulation & Compliance Office, we work with businesses to create the necessary documentation and have the processes in place to ensure the business and its staff are thoroughly protected.

To enquire about our services and how we can service your business, call us on 0203 985 8550 or email us at info@regulationandcomplianceoffice.co.uk

Read other related articles:

AML Registration Is Not Optional: What Recent HMRC Enforcement Means for Regulated Businesses

Client Due Diligence: Historic High-Risk Countries – What Regulated Businesses Need to Know

Estate Agents Under Fire: Over £2.9 Million in AML Fines and What It Means for Your Business