HMRC, not the FCA — and that did not change in 2025
Estate and letting agency businesses have been within the Money Laundering Regulations since 10 January 2020, supervised by HMRC. The 2025 supervision reform, which many agents heard about and reasonably assumed applied to them, does not move the sector: the Treasury's chosen Single Professional Services Supervisor model transfers legal, accountancy and trust and company service providers to the FCA, and estate and letting agents were discussed and left where they are.
The offence is registering late, not doing something exotic
HMRC's instruction is to register before carrying on any activity as an estate agency business, and it states plainly that trading as an estate agency business without being registered, or after registration is cancelled, is a criminal offence.
The published enforcement data makes the point better than any warning could. In the 2025 to 2026 non-compliance list, estate agency businesses are the largest sectoral group with roughly 215 entries, and the dominant breach for the large majority of them is failure to apply for registration at the required time. Not sanctions breaches, not failed due diligence on a complex transaction — paperwork that was late.
The £10,000 trap
From 30 June 2026 the letting agency threshold is £10,000 a month, not €10,000. At the exchange rates prevailing through 2026 that is a lower threshold in sterling terms than the euro figure it replaced, which pulls a band of tenancies into scope that were previously outside it.
HMRC's own guidance page for letting agency businesses still states the euro figure and was last updated in April 2023. The legislation governs and the guidance is simply out of date, but if your compliance file was built from that page it is worth re-running the test.
What we do
We are not an AML consultancy and we do not write your policies for you. What we do is check the position that shows up in the numbers: whether the registration exists, whether it covers every premises you actually trade from, whether the annual declaration has been made and the fee paid, and whether the beneficial owners, officers and managers on the register match the people who are really running the business. That is where the published penalties come from.
Common questions
Are we in scope at all?
If you carry out estate agency work, almost certainly. MLR 2017 reg 8(2)(f) brought estate agents and letting agents into scope on 10 January 2020. Regulation 13 defines an estate agent by reference to s.1 of the Estate Agents Act 1979 and extends it to interests in land outside the UK. HMRC's own list of who must register is broader than most people expect: residential agencies, commercial agencies, online agencies, auctioneers, land agents, relocation agents, letting agents offering estate services, business brokers and transfer agents who broker sales of client businesses, and sub-agents providing estate agency services to a main agency. If you are a sub-agent assuming the main agency's registration covers you, it does not.
What is the letting agency threshold now?
£10,000 or more a month, in pounds, from 30 June 2026. It was €10,000 from 10 January 2020 until then. The change was made by reg 8 of the Money Laundering and Terrorist Financing (Amendment) Regulations 2026, SI 2026/621, substituting the figure in MLR 2017 reg 13(4)(b)(ii). Two conditions must both be met: a term of a month or more, and rent of £10,000 or more per month during at least part of the term. It applies to land generally — commercial as well as residential. HMRC's own guidance page for letting agency businesses still says €10,000 and was last updated in April 2023. The legislation governs, but if you have been working from that page, check your position.
How much does registration cost?
From 1 December 2025: a one-off, non-refundable application fee of £300; a premises registration fee of £400 per premises; and an annual declaration fee of £400 per premises on renewal. The approval process fee is £40 per beneficial owner, officer or manager tested. There is a small business reduction where turnover is below £5,000 — you pay in full and receive a £500 refund once accepted. Adding premises costs the full fee in the first six months of the registration year and half in the second. There is no refund for removing premises, which is worth knowing before a branch closure.
What does HMRC actually penalise?
Registering late, overwhelmingly. HMRC's published non-compliance list for 2025 to 2026 shows penalties across all sectors ranging from £1,050 to £104,000, most clustering between £1,250 and £7,000. Estate agency businesses account for roughly 215 entries — the largest sectoral group published. Typical estate agency penalties run £1,250 to £5,500, with the largest at £18,200. The dominant breach, affecting the large majority of listed entities, is failure to apply for registration at the required time under reg 56. Secondary breaches are failure to notify material changes, no risk assessment, customer due diligence failures, policies and controls, training, record keeping, and failure to notify who the nominated officer is.
Are we moving to the FCA?
No. The Treasury's consultation response of 21 October 2025 chose a Single Professional Services Supervisor model with the FCA as the supervisor, and paragraph 2.11 sets out exactly what moves: legal service providers, accountancy service providers and trust and company service providers — everything currently supervised by a professional body supervisor, plus the ASPs and TCSPs currently supervised by HMRC. Estate and letting agency businesses were floated in the consultation as a possible addition and were not adopted. They stay with HMRC. Timing for the change that is happening is indicative only: the response says implementation depends on enabling legislation, funding and parliamentary time, and gives no firm date.
What do we have to do, beyond registering?
A written risk assessment specific to your business. Documented policies, controls and procedures. Customer due diligence on both sides of a transaction — buyer and seller — at appropriate stages, which is the part agents most often get half right by checking the seller and not the buyer. Enhanced due diligence including politically exposed persons. A nominated officer, whose identity must be notified. Suspicious activity reports to the National Crime Agency. Record keeping, staff training, and registration of beneficial owners, officers and managers who must pass the approval test. SI 2026/621 also amended reg 27 with updated transaction-based triggers for letting agents, and reg 19 on policies and controls.