Money Laundering Rules Tighten for UK Landlords: What You Need to Know Before 14th May 2025

Landlords and letting agents across the UK must take note of new rules that have already crept up on us. From 14th May 2025, new regulations are being introduced to clamp down on money laundering and financial crime within the rental sector. These changes will affect everyone, not just those operating at the top end of the market. Whether you’re a high-street lettings agency, an online platform, or a landlord managing your own portfolio, you’re now expected to comply with a robust new set of legal obligations.

So, what’s actually changed?

These rules now apply to all rental properties, regardless of their value. The days of this legislation being reserved for luxury lettings or high-net-worth tenants are over. Under the revised framework, every tenancy, no matter how modest, is subject to the same scrutiny.

You’re now required to verify the identity of both tenants and landlords. This means obtaining and checking photographic ID, verifying proof of address, and ensuring that the information matches up. But the checks don’t stop there. Before any tenancy agreement is signed, all parties must be screened against the UK’s official sanctions list. This isn’t optional. It’s a legal requirement and applies whether you’re a full-time agent or someone letting out a single property on the side.

For those who self-manage their properties, it’s crucial to understand that these responsibilities cannot be sidestepped. You may not have a letting agent handling your paperwork, but that doesn’t exempt you from the law. You’ll need to carry out these checks yourself and ensure they are done properly.

Once these checks have been carried out, the law now requires you to retain records for at least five years. That includes copies of ID documents, evidence of verification, dates of checks and results of sanctions screenings. If anything appears suspicious, it must be reported immediately to the appropriate authority, the National Crime Agency’s Suspicious Activity Report (SAR) system.

The consequences of non-compliance are, unsurprisingly, severe under an anti-landlord political party. Failure to meet these new obligations could land you with significant financial penalties and, in the most serious cases, imprisonment. The maximum custodial sentence is seven years; not a slap on the wrist but serious time.

If you’re unclear on your obligations or unsure how to implement these procedures correctly, now is the time to seek professional advice – I have an extensive background in property and welcome any enquiries; advice is always free. Compliance is no longer just best practice, it’s the law. These measures are about creating a fairer, more transparent rental market and ensuring the property sector isn’t used to funnel dirty money.