Letting agents will soon have to follow much tougher rules on financial sanctions reporting, and could face fines and prosecution if they break them.
People and firms placed under financial sanctions by the government face restrictions on their investments in the UK and may have their assets frozen – including residential property.
From 14 May 2025, letting agencies will be added to the list of “relevant firms” under financial sanctions regulations. This means that agents will have to report the landlords and tenants they work with to the Office of Financial Sanctions Implementation (OFSI) if they suspect that they:
- Are a “designated person” – a person or legal entity named specifically under a UK sanctions regime, such as the one covering people and firms connected to the Russian government, or;
- Have committed a breach of financial sanctions regulations.
Unlike anti-money laundering supervision rules, which only apply to letting agencies with individual rents for properties of €10,000 (around £8,275) per month or more, there is no financial threshold for sanctions reporting. However, the rules only apply when letting a property for a month or more.
The government keeps a consolidated list of all targets of financial sanctions that agents can check landlords and tenants against, as well as a search tool.
Who will you have to report to OFSI and when?
- If you suspect that a landlord is a designated person or has breached financial sanctions regulations, you must report them at the point that they instruct you to carry out letting agency work on their behalf.
- You don’t have to report prospective tenants to OFSI even if you suspect that they are a designated person. However, if that tenant offers to rent a property for a term of a month or more and is accepted by the landlord, you must then report them.
If you suspect that your landlord or tenant is a designated person or has broken financial sanctions rules, you can find out how to report them here.
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