Estate Agents and AML: HMRC Registration, Customer Checks and Red Flags

Property is one of the most common places for criminals to store and clean money, and estate agents sit at the start of almost every sale. That is why estate agency businesses are supervised by HMRC under the Money Laundering Regulations 2017 and why HMRC published a new set of anti-money laundering guidance for the sector in July 2026. This guide explains who has to register, who counts as the customer, when customer due diligence must be done, what to ask about source of funds and which warning signs HMRC highlights. It is aimed at agents, property professionals and the accountants who advise them. Always read the current HMRC guidance, because the pages have been updated since they were first published.

Who counts as an estate agency business

HMRC's guidance for estate agency businesses, first published on 8 July 2026, defines estate agency work broadly. It covers dealing with customers to buy or sell freehold or leasehold property in the UK, including commercial and agricultural property. It extends to sending out property details, arranging viewings, giving advice, acting as an intermediary and putting up a For Sale board. It also covers property sourcing, deal packaging, investment brokering, buying property to resell, developers selling through a special purpose vehicle, auctioneers and relocation agents acting for buyers. Being online or having no premises does not take a business outside the rules. Providing only a means for parties to contact each other directly is not in scope, and HMRC calls that an advertising provider. A law firm summary of the 2026 update adds that shared ownership resales are expressly treated as estate agency work.

The Money Laundering and Terrorist Financing (Amendment) Regulations 2026 came into force on 30 June 2026. For letting agents, a trade summary of the HMRC update reports that the monthly rent threshold is now £10,000, replacing a euro figure.

Registration

HMRC's registration guidance says a business carrying out estate agency work must register with HMRC and pay the fee before it starts. Trading without being registered is a criminal offence, and HMRC may also issue a penalty, taking into account whether the failure was disclosed or discovered, the reasons and any previous warnings. In the estate agency guidance, all beneficial owners, officers and managers are subject to HMRC's approval checks, and a business may trade once it has applied while those individuals wait for the check. A new branch must be notified to HMRC within 30 days of opening. An appointed representative of an FCA-authorised firm must also register with HMRC, because the FCA is not its supervisor.

Who is the customer

For estate agents the customer is both the buyer and the seller. HMRC says to use a Land Registry check to identify the current owners, and to identify and verify anyone acting on a customer's behalf and confirm they are authorised to do so. There are specific rules for common situations:

• Shared ownership: customer due diligence on all owners and on the buyer.
• Probate: customer due diligence on all executors and beneficial owners.
• Joint sole agency or multi-agency instructions: each agent is responsible for due diligence on the seller, should check that the other agent is registered and should report unregistered agents.

When customer due diligence must be done

According to HMRC, the business relationship with a buyer starts when the seller formally accepts the offer, and identity verification must be completed before that point. With a seller, it starts when an agreement is made or a contract is signed, before marketing begins. HMRC recommends starting buyer checks as soon as possible after first contact and finishing them before an offer is accepted. A relationship cannot be established until all aspects of customer due diligence are complete. If due diligence cannot be applied, the agent must not run transactions through a bank account, must not establish the relationship and must terminate any existing one, and should consider making a suspicious activity report. For auctioneers, HMRC suggests pre-registering bidders or using a condition so that a contract is not binding until the checks are done. A trade summary of the guidance adds that for letting agents, landlord checks should be completed before the property is advertised and tenant and guarantor checks before the tenancy agreement is entered into.

Source of funds and wealth

Establishing source of funds and source of wealth forms part of enhanced due diligence and is mandatory where the customer is a politically exposed person or from a country on the FATF call for action list. HMRC asks agents to consider whether the source of funds changes during a transaction, to take extra care with cash buyers and gifted deposits, to be alert to last-minute changes of mortgage provider, to ask whether the funds are proportionate to the customer's income and to document the reasoning. A bank statement shows that money exists, not where it came from, so record why the explanation is credible as well as which documents you collected. Our guide to politically exposed persons explains the enhanced rules in more detail.

Risk: what HMRC and the National Risk Assessment say

HMRC's "understanding risks" publication says the 2025 National Risk Assessment rates property as a higher-risk sector and estate agency business services as medium risk, with terrorist financing rated low. The risks HMRC highlights include:

• Super-prime property, which HMRC treats as £5 million or more in London and the South East and £1 million or more elsewhere, particularly where politically exposed persons are involved.
• Purchases through corporate structures or trusts in secrecy jurisdictions, where the beneficial owner is hard to identify.
• Residential property, which is generally higher risk than commercial because it is easier to resell and can be lived in.
• Criminals buying property late in the laundering process to distance funds from their origin.

HMRC repeats an estimate from the National Crime Agency that up to £10 billion may be laundered through the UK property market each year. Treat that as an estimate rather than a measured figure.

Red flags

HMRC's list of risk indicators includes a customer's finances not matching the property's price or type, unexplained links between buyer and seller, refusing to provide customer due diligence documents or explain the source of funds, prices well above or below market value without a clear reason, several transactions on the same property in a short period, complex structures and shell companies, overseas intermediaries or an excessive number of intermediaries, no face-to-face contact, payments from unknown third parties, cash or foreign currency, overpayments followed by refund requests and a change of bank account mid-transaction. Customers linked to cash-intensive businesses and virtual office addresses are also on the list.

Risk assessment, record keeping and reporting

An agent needs a written, up-to-date risk assessment that covers money laundering, terrorist financing and proliferation financing, considers customers, geography, services, transaction size and delivery channels, and can be given to HMRC on request. Our guide to the firm-wide AML risk assessment shows how to build one. HMRC says to keep copies of customer due diligence documents for five years after the relationship ends and then delete the data. Suspicious activity must be reported, and an agent should never assume another party in the chain will submit the report. Responsibility also stays with the agent when it uses a third-party compliance provider or identity service, as our guide to reliance on third parties explains.

What accountants should take from this

If you act for an estate agency, make sure it is registered and that its risk assessment is current. If you act for clients who buy or sell property, expect agents to ask for identity and source of funds evidence, and expect those questions to be sharper for cash buyers, gifted deposits and company purchasers.

Frequently asked questions

Is an online-only estate agent covered?

Yes. HMRC says being online or having no premises does not take a business out of scope.

Who must the agent carry out checks on?

Both the buyer and the seller, plus anyone acting for them.

Can an agent rely on a solicitor or bank to do the checks?

Responsibility stays with the agent. Reliance on other parties does not transfer regulatory responsibility.

Where can I get AML training?

See Learnsignal's CPD courses for finance professionals.