From 14 May 2025, new legislation will introduce stricter sanctions checks for landlords and tenants in the UK. This change is part of a broader government effort to protect the rental market from financial crime, and it places additional responsibilities on letting agents and property management companies to comply with updated legal requirements.
As a landlord, it’s essential to understand how these new rules will affect your rental property and what steps you should take to stay compliant.
What Are Financial Sanctions and Why Do They Matter in the UK Property Market?
Financial sanctions are restrictions placed on individuals, organisations or entities involved in serious crimes such as terrorism, money laundering or other illicit financial activity. These sanctions are enforced by the Office of Financial Sanctions Implementation (OFSI) – part of HM Treasury – and can include freezing assets, banning financial transactions, or limiting access to services.
With the introduction of the new sanctions checks, the government is closing loopholes in the private rented sector to ensure that sanctioned individuals cannot operate within or benefit from the UK property market.
New Sanctions Checks for Landlords and Tenants
Previously, only estate agents were legally required to report suspicions of sanctioned individuals. From 14 May 2025, this responsibility will be extended to letting and property management agents as well.
Key changes include:
- Sanctions Checks for Landlords: Letting agents must screen all new landlord clients at the point of instruction. This involves identity verification and checking the landlord against the UK’s consolidated sanctions list.
- Sanctions Checks for Tenants: Once a tenant’s offer has been accepted, letting agents must perform sanctions screening before the tenancy agreement is signed.
These UK compliance checks are now a legal obligation, and agents will be expected to retain records of these verifications as part of their due diligence.
No More Monthly Rent Threshold
Until now, the obligation to conduct these checks only applied to rental property with monthly rents above €10,000 (approximately £8,300), typically affecting high-end lettings.
Under the UK property sanctions 2025, this threshold is being removed. All rental properties, regardless of rental value, will fall under the new compliance requirements — including mid-market and entry-level rentals.
This means that all landlords, regardless of the size or value of their portfolio, will now need to ensure they are working with a fully compliant letting agent.
Legal Consequences for Non-Compliance
Failing to adhere to the new sanctions legislation can result in:
- Unlimited fines
- Criminal prosecution
- Frozen rental income via property freezing orders
- Significant reputational damage
These risks highlight the need for landlords to understand their obligations and to ensure their letting agent is operating in full compliance with the law.
Does Your Existing Tenancy Agreement Need to Be Checked?
The new rules apply to new tenancy agreements starting on or after 14 May 2025. There is no requirement to conduct retrospective checks on existing tenants or landlords.
However, it may still be wise to review your portfolio with your property management provider to identify any potential risk factors, especially if any tenancy changes are expected in the coming months.
Why Partnering With a Compliant Property Management Company Matters
For landlords, partnering with a proactive, compliant property management team is essential.
At Complete, we’ve taken early steps to prepare for the financial sanctions. Our internal processes have been reviewed and updated to integrate the latest legislation to ensure a seamless service and legal protection for our clients. Our teams are undergoing dedicated training to maintain full compliance across all aspects of our lettings and management services.
Whether you’re an overseas investor or a local landlord, our team is here to ensure your rental property is managed responsibly, securely, and in full compliance with the upcoming regulations.
If you have a question or a property that you’d like us to manage, get in touch with our team below.
