From 14 May 2025, letting agents in the UK will become subject to new financial sanctions reporting obligations under regulations overseen by the Office of Financial Sanctions Implementation (OFSI) — a division of HM Treasury. This change is part of a wider effort to strengthen the UK’s financial sanctions regime and combat the circumvention of sanctions.

What Are Financial Sanctions?

Financial sanctions are restrictions imposed to meet the UK’s foreign policy and national security objectives. These can include freezing assets of designated individuals or entities (known as Designated Persons), as well as limits on financial services and investments. These sanctions apply to all UK persons and those operating within the UK’s territory.

Why This Matters to Landlords

Although the direct obligation falls on letting agents, landlords should be aware of the change. Once an agent is formally instructed to act on your behalf, they must be alert to whether you or prospective tenants are designated persons or have breached sanctions regulations.

If such suspicion arises during the course of arranging a tenancy, agents are legally required to report it to OFSI, including any relevant details such as funds held for that person. The obligations also apply regardless of the rental value involved, unlike anti-money laundering rules that only apply to tenancies over €10,000 per month.

When Do Agents Need to Report?

For landlords: From the moment a letting agent is formally instructed, they must report if they suspect the landlord is a designated person.

For tenants: Agents must report suspicions only once a tenancy agreement is in the process of being concluded, not before.

What Should Landlords Do?

• Ensure you provide accurate, verifiable identity information to your letting agent.
• Be aware that your agent is legally obliged to report any sanctions concerns to OFSI.
• If you have any doubts about your position, seek independent legal advice.

This article provides a general overview and is not a substitute for legal advice. For detailed guidance, landlords and agents should consult OFSI’s general and sector-specific information, available on GOV.UK.