Strict new financial sanctions rules, which will affect many landlords, tenants and letting agents, come into force in May 2025. Here’s a quick guide to the changes and what they mean for you.
What are the new financial sanctions rules?
Financial sanctions prevent certain individuals and organisations from conducting business in the UK and allow for their assets to be frozen. Those subject to sanctions typically include individuals suspected of terrorism, corruption, or ties to prohibited foreign regimes.
The Office of Financial Sanctions Implementation (OFSI), part of HM Treasury, oversees the financial sanctions system. They maintain and publish a list of individuals and organisations subject to sanctions.
Certain types of businesses, such as estate agents (and, from 14 May 2025, letting agents) are required to meet specific reporting obligations. If they believe that someone subject to sanctions is attempting to conduct business with them, they must report it to OFSI.
Estate agents are already covered by these rules, but this update will now bring letting agents under the same compliance requirements.
What the new financial sanctions rules mean in practice
The new regulations require letting agents to check that landlords, on whose behalf they let properties, are not listed on the government’s official financial sanctions register.
Additionally, when a tenant applies to rent a property and their application is accepted by the landlord, the agent must check that the tenant is not subject to financial restrictions.
These new regulations will apply to all residential lets of one month or more, regardless of the rental value.
It’s estimated that these changes will affect around 2.9 million rental properties across the UK.
What landlords and tenants need to do
If you are letting or renting a property through a professional letting agent, there is no direct action you need to take. Your agent will manage the necessary compliance checks on your behalf, ensuring all new financial sanctions regulations are met.
However, landlords and tenants should be prepared for their letting agent to request certain personal information and identification documents. This is essential for the agent to perform legally required verifications, including checks under the new financial rules.
It’s important to note that if your agent asks for this information, it does not imply any wrongdoing on your part. They are simply fulfilling their legal obligations.
Agents who fail to comply with these checks risk substantial fines and could even face criminal prosecution. Compliance is not optional – it is now a key part of operating legally within the property rental sector.
Why professional management matters
Understanding and dealing with complex and ever-changing regulations, such as the new financial sanctions requirements, is an essential part of our professional letting and property management service.
Working with an experienced letting agent means peace of mind, knowing that compliance, tenant ID checks, and risk management are handled correctly and efficiently.
If you would like to learn more about how our professional services can simplify your responsibilities as a landlord and ensure full compliance with the latest regulations, contact us today.
We hope you have found this article useful. Please feel free to share it with others who might benefit from this important update.
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