UK 2025 rental rules require mandatory sanctions checks. Avoid £50k fines & 7 years jail with Amani’s certified Right to Rent solution. Stay compliant.
What are the new Financial Sanctions Checks ?
Under the UK’s updated 2025 regulations, all landlords and letting agents must conduct mandatory financial sanctions checks before approving any tenancy agreement. These critical compliance measures require verification that:
- Neither tenants nor landlords appear on the UK’s official sanctions list.
- The Office of Financial Sanctions Implementation (OFSI) maintains the Consolidated List, which screening processes check all parties against.
- Letting agents perform proper due diligence to prevent illegal rental arrangements.
And, for property professionals, this means :
- Digital identity checks are now essential so manual processes won’t suffice.
- Ongoing monitoring is required and not just one-time checks.
Key Changes in the 2025 Regulations.
1. Mandatory Verification Processes.
Letting agents and landlords must conduct thorough due diligence, including:
- Identity verification: Collecting and securely storing valid identification documents such as passports or driving licenses.
- Proof of address: Obtaining recent utility bills or bank statements to verify residency.
- Financial standing: Assessing affordability using proof of income like payslips or bank statements.
2. Sanctions Reporting Protocol.
If landlord and tenant is suspected of being on the sanctions list, letting agents and landlords must file a report with OFSI. The Compliance Reporting Form on GOV.UK must be used, including all supporting documentation.
3. Maintaining Compliance Records
All financial sanctions checks, reports, and findings must be documented and securely stored for a minimum of five years. This includes records of :
- Verification documents
- Dates of checks conducted
- Any reports submitted to OFSI
4. Ongoing Monitoring
Financial sanctions compliance is not a one-time process. Regular checks should be conducted to ensure tenants remain eligible to rent under the new regulations.
How Do These Regulations Differ from Existing AML Rules?
Since January 2020, UK letting agents handling high-value rental properties (€10,000+ per month) have been obligated to register with HMRC for Anti-Money Laundering (AML) supervision. This requires them to perform Customer Due Diligence (CDD) checks and report any suspicious activity to the National Crime Agency (NCA). The new 2025 financial sanctions regulations significantly broaden these requirements which mandate that all letting agents regardless of their property value, must now conduct financial sanctions screenings. This expansion means even agents managing lower-value rentals must implement comprehensive compliance measures that go beyond previous AML obligations, creating a universal standard for tenant and landlord verification across the entire rental market.
AML Compliance: HMRC Supervision & Risk Assessments
Under the Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017, letting agents managing high-value rentals must:
- Register with HMRC for AML supervision (mandatory for legal operation)
- Conduct risk assessments to detect potential money laundering threats
- Perform KYC checks (Know Your Customer) to verify tenant and landlord identities
- Identify beneficial owners to confirm true ownership of rental properties
Penalties for Non-Compliance
Failure to adhere to financial sanctions and AML regulations may result in:
- Substantial fines (determined case-by-case by regulators)
- Criminal charges carrying prison sentences of up to 7 years
- Business sanctions, including revocation of letting licenses
Compliance is mandatory so landlords and agents must follow all current regulations. In order avoid severe penalties.
Why These Changes Matter for Letting Agents
Rental properties are increasingly exploited for money laundering through:
- Property acquisitions funded by illicit money
- Rent payments made with criminal proceeds
- Organised crime networks using tenancies to hide illegal operations
By strictly implementing these regulations, letting agents achieve two critical objectives:
- Protecting their business from legal and financial risks
- Supporting national efforts to disrupt financial crime networks
This dual benefit makes compliance both a legal obligation and an essential safeguard for the UK property sector.
Preparing for May 2025: Action Steps for Letting Agents
With the deadline approaching, letting agents should take the following proactive steps:
- Update Compliance Procedures – Ensure tenant and landlord verification processes incorporate financial sanctions checks.
- Train Staff – Educate team members on new regulations and reporting requirements.
- Implement Secure Record-Keeping – Store due diligence documentation securely for at least five years.
- Engage with Industry Bodies – Stay informed by following updates from professional organizations.
- Monitor OFSI Guidelines – Regularly check official guidance to ensure ongoing compliance.
Conclusion: Don’t Risk Non-Compliance
The May 2025 deadline is fast approaching. Landlords and agents who fail to adapt risk heavy fines, legal action, and reputational damage.
The upcoming changes to UK financial sanctions and AML regulations demand immediate attention from landlords and letting agents. By taking proactive measures to comply with these new rules, the rental industry can mitigate risks, avoid penalties, and contribute to national efforts against financial crime.
Amani: Your Certified Right to Rent Compliance Solution
Meet the UK’s 2025 Right to Rent requirements with confidence using Amani’s government-certified verification platform. As a DIATF-accredited Identity Service Provider (IDSP), we deliver a complete digital solution that simplifies compliance while protecting your business from penalties.
Why Amani for Right to Rent? 
✔ Home Office-Compliant Checks : Verify tenants in minutes using biometric facial matching and document authentication
✔ Automated Sanctions Screening : Cross-check against OFSI lists within the same workflow
✔ Audit-Ready Reporting : Generate and store compliance records for 5+ years
✔ Seamless Integration : Works across mobile, tablet, or desktop with a unified UX
Amani is officially accredited under the UK Digital Identity & Attributes Trust Framework (DIATF), ensuring our checks meet the highest Home Office standards. Our platform combines:
- Liveness detection to prevent fraud
- Real-time document verification
- Automated confidence scoring
Go Digital, Reduce Risk
Replace manual checks with a faster, more secure alternative that:
✅ Cuts admin time by 80%
✅ Eliminates paperwork errors
✅ Provides defensible compliance proof
Ready to simplify Right to Rent?
