New Compliance Rules for the Property Industry
From May 2025, new UK legislation requires letting agents to carry out UK sanctions checks for landlords and tenants. These compliance measures are part of the government’s wider effort to strengthen the property industry’s integrity and prevent financial crime. Here’s what landlords and agents need to know to stay compliant in 2025.
Understanding UK Sanctions Checks
Sanctions are restrictions or penalties imposed by the government against individuals or entities involved in criminal, tSanctions are legal restrictions that stop individuals or organisations involved in criminal or terrorist activity from operating freely. They may include:
- Freezing assets
- Banning travel
- Preventing people from owning or managing companies
The UK Sanctions List currently names more than 5,000 individuals and organisations. Letting agents must make sure none of their landlords or tenants appear on this list before entering into an agreement.
What Landlords Should Expect from Sanctions Checks
From now on, letting agents will conduct sanctions checks whenever:
- A new landlord joins their portfolio, or
- A new property is added to their management list
Each landlord, including joint owners, will need to confirm their identity and ownership. Agents will often ask for:
- Land Registry documents
- Property deeds, or
- Proof of subletting rights if a rent-to-rent arrangement applies
If a landlord operates through a company, trust, or charity, agents will also verify directors, trustees, and beneficial owners. These steps align with anti-money laundering rules, which already require disclosure of ownership through the Land Registry.
As a result, landlords should prepare their documents early to avoid delays.
Sanctions Checks for Tenants and Guarantors
Letting agents must also verify tenants before signing any tenancy agreement. In most cases, referencing providers already include this process. However, some agents may perform the check manually using the UK Consolidated Sanctions List.
In addition, guarantors and permitted occupiers might also be screened, especially if they provide financial support for the tenancy. This step helps prevent hidden risks and ensures transparency for all parties involved.
What Happens If a Match Is Found?
If an agent identifies a person or organisation on the UK Sanctions List, they must report it immediately to the Office for Financial Sanctions Implementation (OFSI).
OFSI will then review the case and decide how to proceed.
Sometimes, agents must pause a tenancy or halt marketing activity until OFSI clears the situation. Therefore, it’s crucial for landlords and tenants to provide accurate details and respond quickly to any requests for clarification.
How the New Rules Protect You
These requirements come from the Sanctions and Anti-Money Laundering Act 2018, as updated by the Sanctions (EU Exit) (Miscellaneous Amendments) (No. 2) Regulations 2024. The new rules now classify letting agents in England and Wales as “relevant firms.”
In practical terms, this means:
- Agents have a legal duty to perform checks
- Landlords must cooperate and provide accurate documentation
- Both sides benefit from a more secure and transparent property industry
By staying proactive and informed, landlords can avoid complications and build stronger partnerships with their agents.
Sanctions Checks in 2025: What It Means for Landlords
The 2025 UK sanctions checks for landlords are designed to strengthen the UK’s property sector and safeguard legitimate investors. They may add a small step to the onboarding process, but they protect everyone involved, landlords, tenants, and agents alike.
If you’re unsure how these checks affect you, Scoffield Stone can help. Our experienced team ensures full compliance while keeping your property journey smooth and stress-free.
Call us today on 01283 733833