From May 2025, UK letting agents will be officially classified as “relevant firms” under the UK’s financial sanctions regime.
This change introduces significant new legal responsibilities, bringing the lettings sector into closer alignment with how financial institutions are regulated when it comes to sanctions compliance.
If you’re a letting agent, or you work with one, here’s what this means, and how to start preparing now.
What’s changing for Letting Agents in May 2025?
Under the updated rules, letting agents will be required to:
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Screen all parties involved in property transactions - tenants, landlords, guarantors, and others will need to be screened against UK government sanctions lists.
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Conduct enhanced due diligence - this includes identity verification and risk assessment, particularly if there’s any link to high-risk jurisdictions or politically exposed persons (PEPs).
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Report immediately to the Office of Financial Sanctions Implementation (OFSI) if they know or suspect that someone involved in the transaction is a sanctioned individual or entity.
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Maintain appropriate audit trails and records to demonstrate compliance.
This marks a significant shift for the lettings industry.
Previously, letting agents had AML obligations when handling rents above a certain threshold, but sanctions compliance now applies regardless of transaction size.
Why do these changes matter?
Financial sanctions are a critical part of the UK’s national security and foreign policy. Failing to comply, even unknowingly, can lead to serious consequences, including:
- Civil or criminal penalties
- Regulatory scrutiny
- Reputational damage
Letting agents will need to ensure they have robust systems in place to manage these risks effectively.
What should letting agents do now?
Preparation is key.
It’s not far away, but letting agents should:
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Review current onboarding processes
Ensure that tenant and landlord checks include ID verification and sanctions screening. -
Update policies and procedures
Reflect the new obligations in your compliance manuals and staff training. -
Choose the right tools
Manual checks are time-consuming and prone to error. Digital tools that automate ID checks, sanctions screening, and audit logging will make it easier to stay compliant. -
Train your team
Everyone involved in onboarding or managing clients should understand what sanctions are, how to identify red flags, and what to do if a match is found.
How MLVerify can support letting agents with these changes
While this post isn’t about selling, it’s worth noting that MLVerify was built for scenarios just like this - where regulatory changes require fast, reliable, and secure due diligence.
Our platform includes:
- Digital ID verification using trusted data sources
- Sanctions and PEP screening built into the verification process
- A secure client portal for collecting documents and managing communication
- Clear audit trails to support reporting and compliance reviews
- A simple way to schedule and record staff training events
- A secure storage for your policies
If there are tools you’re curious about and never used, or scenarios you’re unsure about, drop a post on our community forum and we can all support each other.