A Practical 2025 Guide to AML Compliance for UK Estate Agents

Reputation is crucial in the real estate industry. However, compliance is also important. According to the Money Laundering Regulations 2017 (as amended), you are considered a regulated business as a UK estate agent. This implies that you need to take particular precautions to stop criminals from using your services to finance terrorism or launder money.

Whether you sell residential or commercial property, or handle high-value lettings, AML compliance is not optional.

Who Must Comply Under UK’s Money Laundering Supervision?

HMRC requires you to register for AML supervision if you:

Act as an estate agent introducing buyers or sellers in property sales
Are a lettings agent managing monthly rents of €10,000 or more (approx. £8,500+)

Failing to register puts you at risk of serious fines and could result in illegal trading.

Key AML Requirements for Estate Agents

1. Register with HMRC

You must be registered and pay an annual supervision fee. All relevant persons must pass a fit and proper test.

2. Complete a Business-Wide Risk Assessment (Regulation 18)

You must assess the risks your business faces from:

Your client base
Types of property
Geographical locations
How services are delivered (in-person, remotely, through agents)

💡 Flex Tip: Update this at least annually or when your business model changes.

3. Have Written Policies, Controls, and Procedures (PCPs)

Your written AML framework should cover:

Your approach to risk
Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD)
Record-keeping
Staff training
Reporting Suspicious Activity (SARs)

💡 Flex Tip: Avoid generic templates, instead tailor to your business size and services.

4. Carry Out Customer Due Diligence (CDD)

You must:

Verify the identity of your client (seller)
Check beneficial ownership if acting for a company
Screen for Politically Exposed Persons (PEPs) and sanctions
Use reliable ID verification and cross-check against documents (e.g. passports, utility bills, land registry)

5. Submit Suspicious Activity Reports (SARs)

If anything feels off during onboarding or a transaction, you must submit a SAR to the National Crime Agency (NCA). Reporting isn’t just a legal obligation, it shows that you’re actively alert to potential risks and taking your responsibilities seriously. Regulators want to see that your AML policies are being used in practice, not just gathering dust on a shelf.

6. Train Your Staff

Everyone involved in client onboarding, property sales, or high-value lettings must receive regular AML training, tailored to their role and responsibilities. This includes estate agency staff who handle client identity checks, conduct viewings, negotiate sales, or process transactions. Training should cover the basics of the Money Laundering Regulations, how to carry out Customer Due Diligence (CDD), how to identify and report suspicious activity, and how to spot red flags such as Politically Exposed Persons (PEPs) or unusual ownership structures.

HMRC expects all UK estate agents to keep up-to-date training records and ensure that both frontline staff and senior managers understand their anti-money laundering obligations. Regular training not only helps you stay compliant — it empowers your team to spot risks early and protect your business from fines, reputational damage, or even criminal liability.

How often should AML training be refreshed you ask?

HMRC guidance recommends that AML training is refreshed at least annually, or sooner if there are changes to legislation, risk exposure, or your business model. For estate agents, this could include new services (such as high-value lettings), staff promotions, or increased reliance on remote onboarding. You should also ensure new starters receive AML training before they engage with clients or transactions.

How to evidence training for an HMRC inspection:
Keep a training log for each staff member, including:

The date and format of the training
Topics covered (e.g. CDD, SARs, PEPs, sanctions)
The trainer or training provider
Confirmation that the employee understood and completed it

💡 Flex Tip: Short refreshers, internal quizzes, or scenario-based discussions are a great way to keep learning active and they count toward your training record.

7. Record Retention for UK Estate Agents

Under Regulation 40 of the Money Laundering Regulations 2017, estate agents must retain AML-related documents such as identity checks, risk assessments, and transaction records for at least five years after the end of a business relationship or completion of a transaction.

Once that five-year minimum has passed, you’re also legally required to destroy personal data, unless retention is justified by another legal requirement or with client consent. Crucially, you must not hold records for more than ten years in total!

What does this mean for your business?

Five-Year Minimum: Keep all AML documentation ID verifications, risk scoring files, and formal transaction records for at least five years from file closure or the last transaction.
Don’t Over-Retain: Ensure records are securely destroyed by year ten at the latest, even if they were still being retained after the first five years.
GDPR Alignment: This schedule aligns with data protection laws and avoids unnecessary over-retention. If you intend to keep records beyond five years (up to ten), make sure your terms of business (e.g. client engagement letters) include an explicit retention clause and you have the client’s informed consent.

💡 Flex Tip: Include a clear retention period in your client engagement terms and notify clients of these timelines upfront.

Schedule deletion in advance by setting a firm 10-year destruction date when records are created.

Keep a destruction log with dates, method (secure shred or deletion), and who authorised it.

Common Estate Agent Mistakes That Trigger Fines

Many estate and letting agents unknowingly fall foul of the UK Money Laundering Regulations, leading to costly fines from HMRC. The most common AML compliance mistakes include failing to register for supervision, using outdated or generic AML policies, poor customer due diligence (CDD), inadequate record-keeping, and not submitting Suspicious Activity Reports (SARs) when required. These errors can result in significant penalties, reputational damage, and even criminal liability. Staying compliant with your AML obligations as an estate agent is not just good practice – It is a legal requirement!

Failing to register or renew with HMRC
Outdated or missing AML risk assessments
Not verifying ID before marketing properties
No documentation for client risk ratings
Forgetting to screen for sanctions or PEPs

Summary of Estate Agent AML Responsibilities

AML Requirement	What You Must Do
Register with HMRC	AML supervision is mandatory
Conduct CDD	Verify identity before any transaction
Risk Assessments	Review and update business-wide risks regularly
AML Policies	Keep tailored written procedures
Staff Training	Deliver role-appropriate AML training
Suspicious Activity Reporting	Submit SARs to the NCA as required
Keep Records	Retain all key AML documents for at least 5 years

Why Estate Agents Get Fined

HMRC report on the businesses that have not complied with the money laundering regulations annually. Flex AML has reviewed the data, and here’s the most common reasons estate agents received fines in recent years.

Failure to Register with HMRC

Over 250 estate agencies were fined over £1.6 million in early 2024 for not registering or renewing on time
A further 194 firms were fined more than £1 million in mid-2025

Inadequate AML Policies

Many firms were penalised for outdated or missing policies that didn’t meet HMRC expectations

Poor CDD & Record Keeping

Firms failed to verify clients properly or retain evidence of CDD, ownership, or risk scores

Failure to Submit SARs

Some firms missed obvious red flags and didn’t report suspicious client behaviour or structures

Final Thoughts

HMRC is actively cracking down on non-compliant estate agents. With total fines exceeding £2.6 million in the last 18 months alone, the message is clear: compliance matters.

If you’re unsure whether your current AML setup meets the mark, Flex AML can help with:
✅ Custom AML risk assessments
✅ Ready-to-use policies and procedures
✅ CDD file templates
✅ PEPs and sanctions screening checklists
✅ Staff AML training: CPD certified
✅ Ongoing support for your MLRO

👉 Contact us today and book your free consultation to talk through your current setup.