What this law is
The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, usually called the Money Laundering Regulations 2017 or MLR 2017, set out the anti-money-laundering (AML) duties for regulated businesses, including estate agents.
HMRC supervises estate agents for AML compliance. Every agent must register with HMRC, pay a supervision fee, and demonstrate they have AML procedures in place.
Failure to follow AML rules is a criminal offence. Senior managers can face personal fines, bans from the industry, and in the worst cases imprisonment.
Why it exists
UK property has historically been used to launder money — it is a high-value, slow-moving market that can absorb large sums quickly. The 2017 regulations expanded AML duties to estate agents to close that loophole.
What it means for you
- The agent will ask for photo ID (passport or driving licence) and a recent proof of address (bank statement or utility bill, usually less than 3 months old). They have to verify these — not just glance at them.
- For large or unusual transactions, agents may have to run enhanced due diligence: more ID, source-of-funds checks, information about any company structure behind a purchase.
- Buyers will be asked to prove the source of their funds — especially where money is coming from outside the UK. This is not the agent being nosy; it is a legal duty.
- If an agent suspects money laundering, they must file a Suspicious Activity Report to the National Crime Agency. They are not allowed to tell you they have done this — it is called "tipping off" and is itself a criminal offence.
Red flags to watch for
- ⚠An agent that does not ask for ID — this is itself a breach of the law.
- ⚠Requests for documents via unsecured channels (email attachments in plain text) — your ID deserves better handling.
- ⚠Repeated demands for the same documents with no explanation.
- ⚠Agents asking for documents but giving no privacy notice about how they store and use them (that is a separate UK GDPR breach).
How to use it
- 1Always provide ID through a secure channel. Many reputable agents use platforms like Credas, Thirdfort, or Yoti — these are encrypted and leave an audit trail.
- 2Ask the agent where your documents are stored and for how long. They should have a clear answer.
- 3If you are selling, the agent only needs basic ID. If they are asking for source-of-funds documents from you as the seller, challenge it.
- 4Check the agent is HMRC-registered for AML at gov.uk — it is a searchable public register.
Key terms, translated
- Customer Due Diligence (CDD)
- The standard checks an agent runs on you: ID, address, and basic information about the transaction.
- Enhanced Due Diligence (EDD)
- Extra checks triggered by higher risk — overseas buyers, politically exposed persons, complex company ownership, unusual transactions.
- Suspicious Activity Report (SAR)
- A formal report made by the agent to the National Crime Agency when they suspect money laundering. You will not be told one has been filed.
- Source of funds
- Where the money for the purchase has come from — savings, sale of another property, inheritance, loan, etc.
Official source
This guide is a plain-English summary, not legal advice. For the original text, always go to the official source.
Money Laundering Regulations 2017 on legislation.gov.ukFrequently asked questions
Why is the agent asking for my ID when I am only selling?
Because MLR 2017 requires CDD on both sides of every transaction. The agent is legally obligated, not being intrusive.
Can I refuse to provide ID?
You can, but the agent will then refuse to continue. They are not allowed to act for you without completing AML checks.
What happens to my ID documents after the sale?
They are kept securely by the agent for 5 years after the transaction, then deleted. The agent should have a documented retention policy.
How do I check an agent is registered with HMRC for AML?
Use the HMRC register of supervised businesses, searchable on gov.uk. If the agent is not on it, that is a serious problem — they are operating illegally.