Only a fifth of landlords and letting agents feel ready for new sanctions check rules arriving in May, raising fresh alarm bells in an already overburdened rental sector.
Starting 14 May, letting agents across the UK will be legally required to report any evidence — or even mere suspicions — of financial sanctions breaches to the HM Treasury Office of Financial Sanctions Implementation (OFSI). This will apply from the moment a landlord hires an agent or when a tenant’s offer is accepted, meaning the scope of checks is about to become far broader — and far more complicated.
Why landlords should take notice now
Until now, sanctions checks were only needed where monthly rents exceeded €10,000 (£8,300) — usually the preserve of the prime property market. For the vast majority of landlords, it was a distant concern. No longer. Under the updated rules, every landlord, tenant and rent-paying guarantor will need to be checked, regardless of rent level.
The change stems from the Sanctions and Anti-Money Laundering Act 2018, but it’s only now being applied wholesale to letting agents. Non-compliance isn’t a slap-on-the-wrist affair, either; it carries the threat of fines running into the millions — and in extreme cases, even criminal prosecution.
Nishma Parekh, Goodlord’s Director of Referencing, didn’t mince her words about the scale of the problem: “Faced with a seemingly never-ending barrage of new regulation, it’s little wonder that so many landlords and agents feel concerned about their ability to comply,” she said. She added: “With just weeks to go until mandatory sanctions checks come into force, it’s clear from these figures that there is still a worrying amount of confusion and unanswered questions across the industry.”
Goodlord has tried to throw landlords and agents a lifeline by adding automated sanctions checks into its PRO referencing tool — a welcome move for those already feeling overwhelmed by the constant creep of regulation.
Industry leaders call for better guidance
Propertymark, the respected trade body for letting agents, has also stepped into the fray, urging firms to sharpen their client vetting processes and tighten up record-keeping immediately. Their advice? Take no chances — document everything meticulously in case OFSI comes knocking.
And it’s not just agencies that need to act. Small private landlords — who often manage their own properties without the backing of professional agencies — are also in the firing line if they’re not careful. Many independent landlords fear they’re being set up to fail, without clear, accessible tools to meet these new expectations.
A Manchester-based landlord shared his frustrations: “It’s another layer of red tape without any real support. First licensing, then EPC upgrades, now this. If the government keeps heaping on more costs and admin, good landlords will walk away — and tenants will be the ones to suffer.”
With 14 May fast approaching, landlords across Britain are left weighing their options: invest heavily in compliance tools, delegate to professional agencies (at extra cost), or risk hefty penalties. As the sector braces itself, one thing’s certain — in today’s climate, staying compliant isn’t just best practice, it’s survival.
