As global compliance standards tighten, UK letting agents face fresh obligations under the latest updates to financial regulations. New Sanctions Checks are no longer a back-office formality—they’re now a core requirement for firms operating in the residential lettings sector. Since May 14, 2025, sanctions checks are mandatory for all prospective landlords and tenants, with no rent threshold. In this guide, we break down what the new checks mean for your agency, how to carry them out, and what the risks are if you fail to comply…

What Are the New Sanctions Checks?

New Sanctions Checks refer to enhanced due diligence requirements introduced by the UK government in 2025. These require letting agents to screen clients—both landlords and tenants—against the most current financial sanctions lists.

The lists, maintained by the Office of Financial Sanctions Implementation (OFSI), include individuals, organisations, and jurisdictions subject to financial restrictions, typically for reasons of national security, human rights violations, or international crime.

Under the new rules, letting agents must carry out these checks before entering into any tenancy agreement.

Why Do Letting Agents Need to Comply?

Letting agents are considered “relevant persons” under the UK’s Anti-Money Laundering (AML) regime. This means the property sector is now firmly in the sights of regulators cracking down on financial crime.

Failing to perform New Sanctions Checks can result in:

  • Financial penalties, potentially exceeding £1 million
  • Damage to your agency’s reputation
  • Criminal liability in serious cases

Compliance is no longer just good practice—it’s a legal obligation.

How to Conduct New Sanctions Checks

To ensure your agency complies with the updated requirements, follow these steps:

  1. Use a reliable screening service
    Subscribe to a real-time compliance platform that includes UK and international sanctions lists. Many AML tools now offer this as standard.
  2. Screen all relevant parties
    Check landlords, tenants, guarantors, and any overseas company directors. If a company is involved, verify all beneficial owners.
  3. Keep detailed records
    Document when and how the check was performed, and store results securely. This is critical if you’re audited.
  4. Repeat checks when necessary
    If there are changes in client information—such as a change of name, nationality, or ownership—recheck immediately.

What to Do If You Get a Positive Match

If a check results in a match on the sanctions list:

  • Do not proceed with the transaction.
  • Report the match immediately to OFSI via their online portal.
  • Await further instruction before taking any action.

Proceeding with a transaction involving a sanctioned individual or entity is a breach of UK law.

Integrating Sanctions Checks into Your AML Process

Rather than treating New Sanctions Checks as a separate compliance burden, incorporate them into your existing Anti-Money Laundering workflow.

Many CRM systems and PropTech platforms already offer integration with sanctions databases. If yours doesn’t, now is the time to upgrade or adopt a standalone solution.

How Often Should You Check the Lists?

The OFSI list is updated frequently. You should ensure:

  • Your screening tool updates in real time or at least daily.
  • Any existing tenancies involving politically exposed persons (PEPs) or high-risk clients are periodically rechecked.

Final Thoughts: Stay Compliant, Stay Protected

The message from regulators is clear: if you’re operating in lettings, you are responsible for conducting due diligence on all parties involved. New Sanctions Checks are a non-negotiable part of that process.

In an industry where speed and trust are critical, robust compliance doesn’t have to slow you down—but neglecting it can shut you down.

Key Takeaways:

  • New Sanctions Checks are now a legal requirement for UK letting agents.
  • Checks must be done before tenancy agreements are signed.
  • Use up-to-date compliance tools and keep thorough records.
  • Report any positive matches to OFSI immediately.
  • Integrate checks into your broader AML framework.

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