From 14 May 2025, new UK government regulations will require letting agents to carry out financial sanctions checks on landlords, tenants, and guarantors before any tenancy agreement is completed. These changes aim to ensure that individuals or organisations subject to UK financial sanctions are not involved in the rental market.
As your trusted letting agent, we are committed to making this process transparent and hassle-free. This guide explains what the changes mean, what you can expect, and how you can stay compliant.
What are sanctions checks?
Sanctions checks involve screening individuals or businesses against the UK government’s official sanctions list. These sanctions typically target individuals involved in illegal activities such as terrorism, human rights abuses, or financial crime. If a person appears on the list, it is illegal to enter into financial arrangements with them – including tenancy agreements.
These checks are already common in sectors such as banking and legal services. Now, the property sector is also being brought into line with these measures.
Who is affected?
The regulations apply to:
- Landlords – All landlords must be screened before they can market or let a property.
- Tenants – Sanctions checks are required before a tenancy agreement is signed.
- Guarantors – If a guarantor is involved in supporting the tenancy, they must also be screened.
Importantly, these rules apply only to new tenancy agreements starting on or after 14 May 2025. Existing agreements are not affected retrospectively.
What this means for Landlords
If you are a landlord instructing us to let your property, we are now legally required to check whether you appear on the UK sanctions list. This is done when you formally engage us to market your property.
Here’s what you need to know:
- Identity verification: We will ask for proof of ID and address to confirm your identity.
- Sanctions screening: Your details will be checked against the UK government’s consolidated list of sanctioned individuals and entities.
- Data security: All information is handled securely and used solely for compliance purposes.
If there is a match or suspicion, we are obligated to report it to the Office of Financial Sanctions Implementation (OFSI) and suspend any related transactions.
What this means for Tenants
If you are applying for a rental property through us, a sanctions check will be carried out once your offer is accepted. This will be done before the tenancy agreement is signed.
As a tenant, you should be prepared to:
- Provide identification: This includes proof of identity and current address.
- Consent to a sanctions check: We will screen your details securely against the relevant lists.
- Include Guarantors: If you require a guarantor, their identity will also be verified and screened.
These checks are quick and typically completed within a few minutes using secure verification systems.
Our responsibilities as Letting Agents
As of 14 May 2025, all letting agents fall under the definition of “relevant firms” under the UK’s sanctions regime.
That means we are legally obliged to:
- Conduct checks on all parties involved in a tenancy (landlords, tenants, guarantors).
- Freeze assets or halt transactions if a match is found.
- Report any confirmed or suspected matches to OFSI immediately.
- Keep detailed records of all checks and actions taken.
As part of our membership of the leading industry body, Propertymark, we use robust compliance tools to carry out these checks efficiently and accurately, reducing the chance of human error.
What happens if a match is found?
If an individual appears on the sanctions list, we cannot proceed with the letting or tenancy. We will report the matter to OFSI and follow their instructions. For landlords, this means we cannot legally manage or market your property. For tenants, it means the tenancy will not be granted.
Knowingly transacting with a sanctioned individual is a criminal offence and can lead to severe penalties, including heavy fines and prosecution.
What should you do now?
For Landlords:
- Be prepared to provide ID and address verification when instructing us.
- Ensure all parties with a legal interest in the property are aware of these changes.
For Tenants:
- Have your ID ready once your rental offer is accepted.
- Inform any guarantors about these checks early to avoid delays.
Conclusion
These new regulations are part of a wider effort to ensure the UK property market is safe, compliant, and free from illicit activity. By working with a professional and compliant letting agent like us, you can ensure a smooth rental process.
If you have any questions about the sanctions checks or how they apply to your situation, our team is here to help. Get in touch for more information or support.
