AML checks for letting agents: who to check, when and how

Last reviewed: October 2026. According to GOV.UK, OFSI last updated its guidance for letting agents on 28 January 2026.

Do letting agents need to run AML checks? Yes. Since 14 May 2025, all UK letting agents have had to screen landlords, tenants and guarantors against the UK sanctions list and report any matches to OFSI. Full AML checks for letting agents under MLR 2017, including HMRC registration, only apply where the rent is €10,000 or more a month.

GOV.UK's financial sanctions guidance for letting agents confirms that letting agents became "relevant firms" on 14 May 2025, which gives them reporting duties to the Office of Financial Sanctions Implementation (OFSI). The €10,000 threshold under the Money Laundering Regulations 2017 (MLR 2017) is explained in gunnercooke llp's briefing on the new duties.

In short, there are two tracks: sanctions screening applies to almost every let, while full AML applies only to high-value lets. This guide explains who to check, when to check them, what evidence to keep and what to do if you get a match.

Contents

• Who to check and when
• What is the difference between AML checks and sanctions checks?
• Is there a rent threshold for AML checks?
• What MLR 2017 requires if you let above the threshold
• How to run the checks: a step-by-step workflow
• What happens if there is a sanctions match?
• Penalties for getting it wrong
• Explaining checks to landlords and tenants
• Frequently asked questions

Who to check and when

The Landlord Blog's guide to AML checks for landlords and tenants sets out a sensible order:

• Landlord: at the point of instruction.
• Tenant: after the offer is accepted, but before anyone signs.
• Guarantor: if they will pay the rent or are a party to the tenancy agreement.

The "Financial Sanctions legislation – your questions answered" guide adds a few more people to that list:

• Permitted occupiers, meaning people who will live in the property without being named tenants.
• Anyone gifting funds towards the rent or deposit.
• Beneficial owners of a company landlord or company tenant. A beneficial owner is the real person behind a company, which here means anyone with more than 50% of the shares or control.

The same guide says checks apply to residential and commercial lets of one calendar month or more, at any rent. You do not need to go back and check tenancies that were already in place on 14 May 2025, and a rent review on an existing tenancy does not trigger reporting either.

What is the difference between AML checks and sanctions checks?

AML checks under MLR 2017 are about knowing your customer and spotting money laundering. Sanctions checks make sure you do not deal with anyone on the UK sanctions list. They are separate duties with different triggers.

	AML (MLR 2017)	Sanctions (OFSI)	Right to Rent
What it is	Customer due diligence to prevent money laundering	Screening against the UK sanctions list	Immigration status check
Supervisor or report recipient	HMRC supervises	OFSI receives reports	Home Office
When it applies	Lets of one month or more at €10,000 or more a month	All lets of one calendar month or more, at any rent	Separate Home Office rules for residential lets
Who is checked	Landlords and tenants as customers	Landlords, tenants, guarantors, occupiers, gifters and beneficial owners	Adult occupiers
What you must do	Register with HMRC, write a risk assessment, appoint a nominated officer, carry out CDD	Report known or suspected designated persons or breaches	Check and record immigration status

The AML column is based on gunnercooke llp's briefing. The sanctions column draws on GOV.UK and gunnercooke llp, which notes that the OFSI duty covers all letting agency work, not just high-value lets.

Sanctions and PEPs are also easy to confuse. A PEP is a politically exposed person, such as a senior official or a member of their close family. As Propertymark's guide explains, a sanctions match means freezing assets and reporting, while a PEP needs enhanced due diligence but no report. Dealing with a sanctioned person is illegal, but dealing with a PEP is not.

In practice, most letting agents run sanctions checks on every let and full AML only on the few lets above the threshold.

Is there a rent threshold for AML checks?

For AML, yes. For sanctions, no. According to gunnercooke llp, the full MLR 2017 obligations apply where a let is for one month or more and the rent is €10,000 (roughly £8,600) or more a month. The "your questions answered" guide confirms there is no rent threshold for sanctions checks.

Example 1: a £1,500 pcm HMO. This is well below the threshold, so you only need sanctions screening and OFSI reporting.

Example 2: a £9,000 pcm let. This is above the threshold, so as well as sanctions checks you need HMRC registration, a risk assessment, customer due diligence (CDD) and a nominated officer.

Caveat: the threshold is set in euros, so a let at around £8,500 pcm can fall either side of it as exchange rates move. Check the current rate, record how you reached your decision and, if in doubt, treat the let as in scope.

These examples are for illustration only and are not legal advice.

What MLR 2017 requires if you let above the threshold

Based on gunnercooke llp's summary of the rules, an agent handling in-scope lets needs to:

• Register with HMRC as your AML supervisor before you carry out in-scope lettings work.
• Write a firm-wide risk assessment, backed by policies and controls that match it.
• Appoint a nominated officer, often called the MLRO. This is the person in your firm who receives internal concerns and decides whether they should be reported.
• Carry out customer due diligence: photo ID, proof of address and, for landlords, proof of ownership. As Propertymark's guide describes, add PEP and sanctions screening and apply enhanced due diligence to any PEPs.
• Train your staff, and keep CDD and transaction records for five years in line with MLR 2017's record-keeping rules.

A short checklist your team actually follows is worth more than a long policy nobody reads.

How to run the checks: a step-by-step workflow

Here is how letting agents typically run checks through Veyco, from instruction to signing.

1. At instruction, send the landlord a verification link. They verify their ID in the Veyco app using biometric checks and chip reading, and we screen them against sanctions, PEP and watchlist data. You can also add a property ownership check.
2. Once the offer is accepted, send links to the tenant, any guarantor and any permitted occupiers, and add a source of funds check if someone is gifting funds. This follows the order set out in the Landlord Blog guide and the coverage in the "your questions answered" guide.
3. Review the results. Clear the file, escalate a possible match, or apply enhanced due diligence to a PEP, in line with Propertymark's guide.
4. Record the outcome: what you checked, which lists you used, the date, who reviewed it and what you decided. The "your questions answered" guide notes that screenshots can be used as proof of manual checks.
5. Sign the tenancy only after the checks clear. The case record becomes your audit trail, which you can access through the portal or, via our API, inside your case management system.

Agencies can run the service under their own branding or keep the Veyco brand visible.

Manual vs digital checks: time, cost and ongoing monitoring

According to the "your questions answered" guide, a manual check means searching both the OFSI Consolidated List Search and the UK Sanctions List, then saving screenshots as proof.

Manual checks are free, but they are slow and easy to get wrong when names are spelt differently. They also do not verify ID or alert you if someone is added to a list later.

Digital screening handles ID, PEP and sanctions checks in one step, keeps a timestamped record and can monitor people for the length of the tenancy. To compare costs, weigh the price per check against the staff time each manual search takes. Our pricing page sets out the per-check costs.

What happens if there is a sanctions match?

1. Pause the transaction. Do not take any money, and do not tell the person they may be sanctioned.
2. Rule out a false positive. Compare date of birth, nationality and address with the list entry, and record your reasoning.
3. Report to OFSI. gunnercooke llp explains that the duty applies where you know, or have reasonable cause to suspect, that a person is designated or has breached sanctions. The "your questions answered" guide says reports must be made to OFSI by email.
4. Keep the routes separate. A SAR (suspicious activity report) goes to the National Crime Agency when you suspect money laundering. The same guide is clear that filing a SAR, or reporting to your regulator, does not satisfy your OFSI duty.
5. If the match is a PEP, apply enhanced due diligence instead. Propertymark's guide confirms there is no need to report it.

Penalties for getting it wrong

According to Coadjute's landlord FAQ, criminal penalties for sanctions breaches can reach 7 years in prison, an unlimited fine or both, while civil penalties can reach £1 million or 50% of the value of the breach. OFSI's guidance on GOV.UK has the full detail.

HMRC enforces breaches of MLR 2017 separately. In either case, your record of each check is your main evidence that you acted reasonably.

Explaining checks to landlords and tenants

Clients are more cooperative when they understand why you are asking, and a short message usually does the job:

"Since May 2025, the law requires us to check everyone involved in a tenancy against the UK sanctions list. It takes a few minutes on your phone. Please use the secure link below."

Fees: the Tenant Fees Act 2019 limits what you can charge tenants, so check it before passing on any cost. Set out any landlord fee in your terms of business.

UK GDPR: tell people why you process their data, keep only what you need and follow your retention policy.

Ease of use: a link clients can open on their phone, with a UK-based support team behind it, means fewer people drop out partway through.

Frequently asked questions

Do letting agents have to carry out AML checks? All letting agents must run sanctions checks on lets of one month or more, as GOV.UK and the "your questions answered" guide confirm. Full AML under MLR 2017 only applies where the rent is €10,000 or more a month, according to gunnercooke llp.

Do estate agents carry out AML checks? Yes. Estate agency sales work falls under MLR 2017 and HMRC supervision. Our guide to AML compliance for property firms covers it in full.

What are the new AML regulations in 2026? The most recent change is OFSI's update to its letting agent guidance on 28 January 2026, as shown on GOV.UK. Check GOV.UK for any later changes. We list our own updates to this guide in our changelog.

Do we need to check existing tenants or monitor them during the tenancy? According to the "your questions answered" guide, you do not need to go back and check tenancies that were already in place on 14 May 2025. Ongoing monitoring during the tenancy is still good practice.