Why is it relevant to...

Purchasing property in the UK is a common method used by serious organised criminals to launder the proceeds of criminal activity. The sheer size of the property market in the UK and the high value of property assets means that extremely large amounts of criminal funds can be ‘cleaned’ in a single transaction.

Read the HMRC guidance →

The Fifth Money Laundering Directive expanded the scope of obliged entities within the property sector to include the letting agency sector for high-value transactions with a monthly rent of EUR 10,000 or more. 

A high value dealer is a business (firm or sole trader, who or whose employees) that deal in goods or services and makes or accepts cash payments over the value of €10,000 (or its equivalent in another currency) whether that is in a single payment or a series of payments.

This includes chattels auctioneers where proceeds of crime can be 'cleaned' through purchases of high value items such as jewellery and cars.

Read the HMRC guidance →

Under the Fifth Money Laundering Directive the rules are extended to persons trading or acting as intermediaries in the trade of works of art, including when this is carried out by art galleries and auction houses, where the value of the transaction or a series of linked transactions amounts to €10,000 or more.

Reducing economic crime in the property sector

Our position paper outlines Propertymark’s recommendations that the UK Government should include in future economic crime legislation as well as other plans and reforms to reduce economic crime in the property sector.

The recommendations focus on improvements in six key areas:

  • UK property sector
  • Compliance
  • Supervision
  • Enforcement
  • Suspicious Activity Reports
  • Register of Overseas Entities

Following the release of the UK Government’s Economic Crime Plan and building on the introduction of the Register of Beneficial Ownership, the proposals set out in our position paper will help reduce economic crime in the property sector and ensure the UK isn’t used as a haven for criminal activity.  We need to ensure those working in the sector are qualified and regulated and we need a supervision regime that caters for the specific needs of the property sector. Agents need more support in complying with their legal and reporting obligations as well as how to carry out checks and we need more enforcement including a joined-up approach across the British Overseas Territories.

Timothy Douglas Serious.jpg
Timothy Douglas Head of Policy and Campaigns | Propertymark

Read the position paper 

Our Influence

Inputting into global guidance for the real estate sector

In July 2022, the Financial Action Task Force (FATF), which is the global money laundering and terrorist financing watchdog, revised its Risk-Based Approach Guidance for the Real Estate Sector.

The UK’s regulation of money laundering ultimately derives from the FATF standards. The guidance highlights the importance for the sector to increase its understanding of the money laundering and terrorist financing risks it faces.

Our Policy and Campaigns Team were instrumental in helping draft the guidance through a project which CEPI co-lead with the Governments of Canada and the United States of America.

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08 Aug 2022
Anti-Money laundering high on UK Government’s agenda

Following HM Treasury approval, on 27 July 2022 the UK Government updated guidance for estate and letting agent businesses supervised for anti-money laundering. Designed to help agents comply with the Money Laundering Regulations 2017, it covers customer due diligence, record keeping and reporting suspicious activity. 

Anti-money laundering training and resources

We have created several resources, forms and training courses to help Propertymark members comply with their Anti-Money Laundering obligations.

Campaign success

Register of overseas entities

After years of campaigning the UK Government introduced a public register of overseas entities owning property in the UK through the Economic Crime (Transparency and Enforcement) Act.

In 2018, we gave evidence to the House of Commons Treasury Committee Inquiry into Economic Crime and hosted a roundtable with civil servants from the Department for Business, Energy & Industrial Strategy (BEIS) and members of Propertymark who work as estate agents to review the UK Government’s proposals for a register of beneficial owners of overseas companies and other legal entities.  

In 2019, we proved a written response to the Joint Committee on the Draft Registration of Overseas Entities Bill, and we responded to the HM Treasury consultation on the proposed steps that the government will take to transpose the Fifth Money Laundering Directive into national law.

More recently we met with senior politicians to lobby for the introduction of the Register of Overseas Entities and in 2022 we ran a virtual roundtable with Propertymark members and Companies House inputting to help shape the usability and development of the Register.

We called on the UK Government to introduce a public register of overseas entities owning property in the UK back in 2018 and it is high time that legislation has been brought forward. Despite repeated promises, including being mentioned in the December 2019 Queen’s Speech, the UK Government failed to deliver. But recent world events serve as a reminder that property is a high-risk sector for money laundering because any foreign company can buy property in the UK without having a presence in the country. Criminal funds can be concealed and made to look legitimate through an untraceable ‘company’ and subsequently the purchasing of property. To maintain integrity in our housing market it is vital to know who the ultimate owner of a property is.

Timothy Douglas Serious.jpg
Timothy Douglas Head of Policy and Campaigns | Propertymark
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01 Aug 2022
New Register of Overseas Entities launched

The new Register of Overseas Entities is being introduced by the Economic Crime (Transparency and Enforcement) Act which has launched today, 1 August 2022. It will be held by Companies House and forms part of the UK Government’s strategy to combat economic crime.

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19 Jan 2024
UK Government plans to crack down on corruption in the property sector

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) received Royal Assent on 26 October 2023 and has made provision for changes to the Register of Overseas Entities (particularly to address and land information) that will impact almost all overseas entities in some way, although no timeline for implementation has yet been published.

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19 Jan 2024
Update to AML rules for politically exposed persons

The UK Government has amended the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, to send a clear message to regulated firms about how to treat politically exposed persons (PEPs) when carrying out enhanced due diligence checks. The new regulations came into force on 10 January 2024.

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15 Nov 2023
Anti-money laundering application advice issued

HM Revenue and Customs (HMRC) has seen a rise in new applications for AML (anti-money laundering) supervision where applicants do not have the required risk management procedures in place which is a barrier to becoming compliant.

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19 Oct 2023
Propertymark's campaign on business banking heard in Westminster

A debate in Westminster Hall on undesignated client accounts brought by the Rt. Hon. Kelly Tolhurst, the Conservative MP for Rochester and Strood, with input from Propertymark, resulted in assurances from HM Treasury that action will be taken to improve guidance and reform anti-money laundering procedures if necessary and end the unfair denial of banking services to property agents.

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06 Oct 2023
Propertymark consulted on the difficulties of Pooled Client Accounts

Proposals to address difficulties in accessing banking services are being developed and a consultation will begin later in 2023. Following our letter to the Chancellor of the Exchequer in August 2023, Treasury Lords Minister Baroness Penn responded seeking our engagement through this process.

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25 Jul 2023
UK Government considering reform of anti-money laundering supervision

HM Treasury has launched a consultation setting out four possible models for AML supervision with potential implications for sales and letting agents, property auctioneers and high-value dealers across the UK. The proposals are in line with the UK Government’s commitment to the Economic Crime Plan 2023-2026 and they are now seeking views on the potential benefits and disadvantages of each option.