AML Compliance Essentials for Real Estate Firms:
What HMRC Expects in 2025
The UK property market remains a prime target for money laundering activities, and HMRC’s supervision of estate and letting agents will be even more rigorous in 2025. Whether you’re a small local agency or a large national firm, understanding and meeting these expectations is vital to protect your business — and avoid substantial penalties.
Why AML matters in real estate
Criminals often use property transactions to conceal the origins of illicit funds. The high values involved, coupled with the potential for complex ownership structures and cross-border transactions, make the real estate sector particularly vulnerable. HMRC’s job is to ensure firms are doing their part to prevent this abuse.
HMRC expects the following in 2025
A firm-wide risk assessment that reflects reality - HMRC will expect to see a detailed, up-to-date risk assessment that genuinely reflects the risks your business faces. This means considering:
o The types of clients you deal with (e.g., overseas investors, PEPs, cash buyers)
o The nature of your transactions (e.g., high-value properties, off-plan sales)
o Delivery channels (e.g., face-to-face vs. remote)
Tailored AML policies and procedures - Your policies should flow logically from your risk assessment and outline clearly how you apply customer due diligence (CDD), enhanced due diligence (EDD), record-keeping, reporting of suspicious activity, and ongoing monitoring
Customer due diligence done properly and on time - HMRC expects you to:
o Verify the identity of buyers, sellers, landlords, tenants, and beneficial owners
o Understand and document the source of funds — particularly for high-risk transactions
o Complete CDD before establishing a business relationship or carrying out transactions
Staff training and awareness - All relevant employees must understand AML risks and your firm’s procedures. Training should be tailored, practical, and refreshed regularly.
Strong record-keeping - HMRC will look for clear evidence of what checks were done, by whom, and when. Poor records are a common weakness in inspections.
Common pitfalls to avoid
❌ Generic, out-of-date risk assessments — HMRC can spot these quickly. Your assessment must be updated on an ongoing basis.
❌ Incomplete or inconsistent CDD records — Missing beneficial ownership info or weak source of funds checks are red flags.
❌ Lack of staff engagement — Frontline staff must understand how to spot suspicious activity and what to do about it.
❌ Policies that exist on paper only — HMRC will test whether what you say matches what you do.
Final Thought
If you'd like support in ensuring your firm is compliant, Reguloop offers a free 1-1 consultation to talk through your firms specific needs and challenges.