Stay Protected, Stay Compliant: A Useful guide for UK Real Estate Professionals
Estate agents in the UK are classed as regulated businesses under the Money Laundering Regulations 2017 (as amended). This means you have a legal duty to identify and reduce the risk of your business being used for money laundering or terrorist financing.
This AML guide for estate and letting agents will walk you through the key areas to assess risk, along with important updates on UK sanctions compliance that came into force on 14 May 2025.
Understanding Your AML Compliance Duties
To comply with UK AML regulations, estate and letting agents must adopt a risk-based approach. That means assessing the specific risks your business faces and tailoring your due diligence and ongoing monitoring accordingly.
You must document a formal AML risk assessment, covering five core areas:
1. Customer Risk
Think about who your clients are. Ask:
- Are they a Politically Exposed Person (PEP) or connected to one?
- Do they display unusual wealth, offshore interests, or complex ownership structures?
- Are they acting on behalf of someone else or using a third party?
💡 Flex Tip: If yes, enhanced due diligence (EDD) will likely be required.
2. Property Risk
Assess the risk level of the property itself:
- Is the property value unusually high or being paid for in cash?
- Is there no clear reason for the client’s interest in this specific property?
- Is it a luxury, commercial, or unoccupied property with limited explanation?
💡 Flex Tip: These factors raise red flags and should trigger further investigation.
3. Jurisdiction Risk
Where are your clients and their funds coming from?
- Are they linked to a high-risk third country or sanctioned jurisdiction?
- Is there limited transparency around source of funds or source of wealth?
💡 Flex Tip: Countries with weak AML systems, high corruption, or ongoing conflict are higher risk.
4. Delivery Channel Risk
How are you interacting with the client?
- Are you meeting in person or is everything done remotely?
- Are third-party intermediaries involved?
- Are clients refusing face-to-face meetings without clear reason?
💡 Flex Tip: Remote-only clients can be riskier due to limited identity verification opportunities.
5. Transaction / Activity Risk
Look closely at how the deal is being done:
- Are they paying above asking price, avoiding negotiation, or in a rush to complete?
- Is the transaction inconsistent with their known background?
- Are there signs of layering or money being moved quickly without reason?
💡 Flex Tip: Unusual or unexplained activity must be documented, assessed, and potentially reported via a Suspicious Activity Report (SAR).
Why a Strong AML Risk Assessment Matters
Your AML risk assessment is the foundation of your compliance programme. It:
- Helps you prioritise high-risk customers and transactions
- Informs how much due diligence you perform
- Ensures your business stays compliant with UK law
- Reduces the chance of being exploited for financial crime
💡 Flex Tip: Review and update your risk assessment at least annually, or whenever your business model changes.
Need Support With Your AML?
At Flex AML, we help UK estate and letting agents stay ahead of compliance with:
- Custom AML risk assessments
- Sanctions policy and procedure templates
- Team training (in person or remote)
- Pre-HMRC audit support and mock reviews
📞 Book your free 30-minute consultation today – we’ll review your current setup, identify any gaps, and help you strengthen your defences without overwhelming your team.
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