Materials and training for our members who must comply with MLRs is regularly produced, with best practice suggesting that all property agents, including letting agents who do not meet the 10,000-euro threshold, carry out some form of customer due diligence (CDD).
However, some confusion remains in the sector about how to carry out CDD. Much of the guidance provided by HMRC focusses on when to carry out checks and not how they can be completed effectively.
More detailed and practical guidance
Currently, a significant majority of both letting and sales agents carry out customer due diligence on every new client, landlord, or tenant, even though they are not legally required to do so.
Agents understand that they have AML duties, but 96% of our survey respondents said they would welcome more prescriptive guidance on how to meet their obligations, especially for more complex situations like identifying beneficial owners and sources of funds.
Ensure access to banking services
Of our survey respondents who had experienced the closure of a pooled client account, 96% said they were either given no reason or told that the bank was closing all undesignated accounts held by letting agents.
Propertymark has successfully campaigned for improved guidance for the financial sector, and it is extremely concerning that it is still being ignored in practice. We urge HM Treasury to take stronger action to ensure agents can access the banking services they need to carry out their roles compliantly.
Fully include all letting agents
We have campaigned for the removal of the threshold which currently limits AML supervision to letting agents with at least one let property with monthly rents of 10,000 euros or more.
Removing the threshold for supervision would end uncertainty for agents and create consistency across all housing tenures, further reducing the risk of money laundering through UK property. Allowing all agencies to become supervised firms would also provide reassurance to banks that the sector does not present an inherent risk.
Define low-risk scenarios
Where there is no reason to suspect a raised risk, a mechanism is needed for firms to carry out simplified due diligence. By reducing the administrative burden in these cases agents will be freed up to focus more time and resources on clients, landlords and tenants that present a higher risk.
Digital identities
Half of the surveyed members said they do not currently accept digital identities for AML checks, citing a lack of trust in third-party services, the cost of digital checks, and the fact that physical ID is accessible to nearly everyone.
However, 84% stated that comprehensive guidance and a central database which could help screen out fakes would encourage them to start using digital identities.
