Letting agents across the UK are now legally required to screen every landlord and tenant against the UK government’s sanctions list, following a regulatory shift that came into force today. The move places private landlords firmly within the remit of financial sanctions enforcement – a space previously dominated by banks, estate agents, and law firms – with potentially significant implications for investor landlords.
Legal change ushers in mandatory checks for all landlords
In a marked escalation of compliance responsibilities, the Office of Financial Sanctions Implementation (OFSI) has declared that sanctions screening is now a standalone legal duty. Letting agents must verify all landlords, tenants, and clients against the official UK sanctions list. If a match – or even a reasonable suspicion – is found, agents must immediately freeze the individual’s assets and report them to OFSI.
Nishma Parekh, referencing director at Goodlord, didn’t mince words: “Every single landlord and tenant, no matter the rental value, must now go through sanctions checks.” She went on to caution that landlords need to act fast: “With four in five landlords feeling unprepared for the changes, it’s vital that they get their ducks in a row immediately if they want to stay on the right side of the law.”
And the penalties are no small matter. “If they fail to comply – even if it’s a genuine mistake – they could be facing unfathomable fines of up to £1 million,” she added.
Sanctions list targets serious financial and criminal actors
The sanctions list is no mere formality. It names individuals and organisations suspected or proven to be involved in terrorist financing, political corruption, human rights abuses, or organised crime. While most UK landlords will never fall within those categories, the law makes no distinction based on likelihood – everyone must be checked, every time.
Importantly, these checks are not just part of anti-money laundering (AML) procedures anymore – they’re now a legal obligation in their own right. That distinction matters. A letting agent who forgets to run a check, or fails to spot a listed name, could now be held liable even if they had no intent to breach the law.
Propertymark, the professional body for letting agents, issued guidance describing the change as “a vital part of ensuring the property market remains secure and trustworthy.” The group has urged agents to update their procedures immediately and ensure landlords are made aware of the changes.
What proactive landlords should do now
While the policy introduces yet another bureaucratic hoop, landlords who take compliance seriously could find themselves at a competitive advantage. This isn’t just red tape for the sake of it. As more regulations pile on, those who build systems to stay ahead may find themselves standing out as professional, trustworthy operators – particularly appealing in a market where tenants and letting agents alike are under pressure to reduce risk.
One Midlands-based landlord with a 12-property portfolio, who asked not to be named, told us: “It’s another thing to manage, but I’d rather deal with a check now than a legal letter later. If we’re going to be treated like a business, then we have to act like one.”
Letting agents are now formally classed as “relevant firms” under UK sanctions legislation – a term that puts them on the same footing as banks and solicitors. This reclassification changes the landscape for landlords who self-manage or rely on smaller, less established agencies. It may be time to reconsider who you trust with your compliance – and whether your current setup is robust enough to meet the new standard.
The Foreign, Commonwealth and Development Office (FCDO) maintains the sanctions list, while OFSI offers a consolidated version focused on financial sanctions. Both are publicly accessible, and landlords are encouraged to review them directly or work with agents who already have systems in place for regular screening.
For further information visit: UK financial sanctions general guidance.
