The UK property industry feels that a recent Government decision not to include letting agents in its proposals for legislation to meet requirements of the fourth Money Laundering Directive is wrong.
There are many elements of the consultation on the directive that are likely to have an impact on the property sector. While letting agents will be expected to carry out consumer due diligence, lettings agents will not.
This means that buyers and sellers of properties will be checked by estate agents, but tenants and landlords won’t.
David Cox, Chief Executive of ARLA Propertymark, said: ‘We’re disappointed the Government has chosen not include letting activity within the money laundering regulations 2017.’
‘The risk with this is that money laundering activity will transfer from the sales sector due to the increased powers within the new regulation, into the lettings sector which remains unregulated. However, within the context of the recently increased legislative burden on letting agents, coupled with the shock announcement to ban letting agent fees in the Autumn Statement, we understand why the Government has chosen not to impose these requirements at this critical juncture,’ he continued.
Agents are not going to be included in Money Laundering Directive
Mark Hayward, NAEA Propertymark Chief Executive, believes it is good news that the consultation on money laundering has appeared. He believes that when legislation comes into force, it is imperative that the sector acts to implement the changes.
Hayward said: ‘The Government has announced that purchasers are now included in the application of customer due diligence, so additional checks will need to be made by sales agents and auctioneers, which will be complicated by the fact that buyers are sometimes at arm’s length and there’s not necessarily a face to face relationship.’
‘However, further clarity will be required as to what point the purchaser becomes a purchaser and this is an issue we will be seeking guidance on,’ he added.