New Legal Requirement from May 2025: What Lettings Agents, Landlords & Tenants Need to Know About Financial Sanctions Checks....

From 14 May 2025, a new legal obligation will come into force requiring letting agents in the UK to carry out financial sanctions checks on both landlords and tenants. This move marks a significant step in aligning the private rental sector with national compliance standards—and it’s something all parties in the lettings process should be aware of.

Why Has This Been Introduced?

This change forms part of the UK government’s broader efforts to clamp down on money laundering, organised crime, and the misuse of property for illicit activities. By classifying letting agents as “relevant firms” under financial sanctions legislation, it ensures the same level of scrutiny is applied to tenancy agreements as it is to other financial dealings, like property sales and banking.

While the vast majority of tenants and landlords are law-abiding, this regulation is about protecting the integrity of the UK housing market. It’s also designed to prevent anyone listed under UK financial sanctions from benefitting from or participating in the rental system.

What Does This Mean in Practice?

As a letting agent, we’ll now be required to:

• Check all new landlords and tenants against the UK’s consolidated list of sanctioned individuals or entities before any tenancy agreement is signed.

• Report any matches or suspicions to the Office of Financial Sanctions Implementation (OFSI) and pause any transactions while the matter is investigated.

• Maintain records of these checks and keep them securely for at least five years.

• Implement regular training and reviews to ensure compliance across our team.

What Does This Mean for Landlords?

While this does introduce another level of regulation (and cost) for agents like us, it also delivers a key benefit to you as a landlord:

Increased protection and peace of mind.

By working with a professional, compliant letting agent, you’re reducing the risk of unknowingly entering into a tenancy agreement with someone on a government sanctions list. It’s a small safeguard that can prevent potentially serious legal and financial consequences down the line.

This also reinforces why using a reputable, regulated agent is more important than ever—not just for day-to-day management, but to ensure you’re aligned with all legal responsibilities in an increasingly complex landscape.

What About Tenants?

Tenants should be reassured by these changes too. The checks are non-intrusive and straightforward, and they’re simply a safeguard to ensure that all parties in a tenancy agreement are legally permitted to be there. If you’re not on any sanctions list (which, for the vast majority of tenants, you’re not), there’s nothing to worry about.

Why It Matters

We understand that this is yet another financial and administrative responsibility that letting agents must take on—but it’s one that supports a safer, more transparent rental market. It also highlights the value of choosing an agent who takes compliance seriously—protecting both landlords and tenants alike.

Want to Know More?

If you’re a landlord wondering how this affects your current or future tenancies, or a tenant with questions about the process, get in touch with our team today. We’re here to guide you through the changes and make the process as seamless as possible.